Question: 12. The production function for a commodity can be approximated over a restricted range of relevant input levels by a linear relationship of the form

12. The production function for a commodity can be approximated over a restricted range of relevant input levels by a linear relationship of the form Y ¼ xb + «.

The columns of x include, in order, a column of 1’s, and three column vectors representing observations on labor, energy, and capital input levels. Thirty observations on weekly production levels yielded the following summary statistics:

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