I think its some basic question but I'm really confused about MUX/DEMUX. Should I use 2-output demux's outs for in?
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You can build the binary tree of muxes. First mux has outputs connected to 2 muxes, providing 4 outputs, next stage will have 4 muxes. Total you will have 7 muxes in 3 stages. Each of 3 address inputs is connected to inputs of corresponding stage. (Just revert the picture below upside down, so it were demuxes not muxes)
