Can you suggest a method for using the reduced form (11 4) and (11 5) to obtain an estimate of the slope of the supply function Q b1P es In particular, suppose that the estimated reduced form equations are P 18X and Q 5X What is an estimated value of b1 (Hint look at the expressions for p1 and p2 )

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Question: Can you suggest a method for using the reduced-form (11.4) and (11.5) to obtain an estimate of the slope of the supply function Q

Can you suggest a method for using the reduced-form (11.4) and (11.5) to obtain an estimate of the slope of the supply function Q ¼ b1P þ es? In particular, suppose that the estimated reduced-form equations are P^ ¼ 18X and Q^ ¼ 5X. What is an estimated value of b1? (Hint: look at the expressions for p1 and p2.)

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