2. Marc Nerlove has estimated the following cost function for electricity generation. Y=AX papa pasu Where, Y total Cost of production. P2 price of capita input X-output in kilowatt/hours P3 price of fuel P₁ price of labor u disturbance term Theoretically, the sum of the price elasticities is expected to be unity i.e., (a+a2+α3)=1. By imposing this restriction, the preceding cost function can be written as ((Y/P3)=AX (P/P) (P₂/P3) u On the basis of a sample of 29 medium-sized firms, and after logarithmic transformation, Nerlove obtained the following regression results: In Y -4.93+0.94 In X +0.31ln P-0.26 In P2 +0.44 In P3 Se (1.96) (0.11) (0.23) (0.29) (0.07) (1) RSS = 0.336 (2) RSS=0.364 In(Y/P) -6.55+0.911n X +0.51ln(P/P3)-0.09 In(P₂/P3) = (0.16) (0.11) (0.19) (0.16) Se Where Se stands for standard error of regression coefficients a. Interpret regression results given by equations (1) and (2). b. Test the hypothesis that coefficient of LN(P, is less then 0.5? c. How you would test that the restriction (a +α2 +α3) = 1 is valid?