You now know that supply equations can be estimated using regression methodology. Suppose that you collect data and run a regression to estimate the supply equation for a particular product. The resulting supply equation is as follows:
Qs= -400+10PX-5PI-0.35PZ
Where
Qs = quantity supplied of good X
PX = price of good X
PI = price of inputs for Good X
Pz = price of good Z
What is the equation of the supply curve if the input price level is $13, and the price of good Z is $15?
a.Qs = -465 + 10Px.
b.Qs = -470.25 + 10Px.
c.Qs = 47.025 + 10Px.
d.Qs = -400 + 10Px.