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April 11th, 2011, 09:25 AM  #1 
Member Joined: Dec 2010 From: Drachten, the Netherlands Posts: 49 Thanks: 0  parameters direct demand functions
I have the following inverse demand functions: p1=d1e1y1fy2 p2=d2e2y2fy1 and the following corresponding direct demand functions: y1=a1b1p1+cp2 y2=a2b2p2+cp1 Given these demand functions, I have to derive formulas for the parameters of the direct demand functions (ai,bi,c, for i=1,2)) Can someone please explain me how to do this. This problem really frustates me. I know that the answer are ai=(d1e2d2f)/(e1e2f^2), bi=ej/(e1e2f^2) and c=f/(e1e2f^2) (where i is not equal to j) PLEASE help me. I do not even know how to start 

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