Assume That a Firm Wants to Use Multiple Regression Analysis $Q _ { X } = a P _ { X } + b \left( I + P _ { Y } \right) + e$

Multiple Choice

Assume that a firm wants to use multiple regression analysis on Excel to estimate how the demand for its product X depends on price of its product, consumer's income (i) and a price of a substitute Y. Which of the following explicit linear form should the firm use?

A) $Q _ { X } = a P _ { X } + b \left( I + P _ { Y } \right) + e$
B) $Q _ { X } = a P _ { x } + b _ { 1 } I + b _ { 2 } P _ { Y }$
C) $Q _ { X } = a + b _ { 1 } P _ { X } + b _ { 2 } I + b _ { 3 } P _ { Y } + e$
D) $Q _ { X } = a + b _ { 1 } P _ { X } + b _ { 2 } I + b _ { 3 } Q _ { Y } P _ { Y } + e$