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Consider the following supply and demand equations I q

Consider the following supply and demand equations q 5 p/2 + v, for a number of markets i = 1, 2, ... , 100. Suppose that the values of (u, v) are generated from Ui Niid uniform[O, umac], Vi vmaz] where umaz [O, 2] and vmaz [O, 2]. Assume that Ui is independent of Vj for all i, j = I, 2, , 100. We do not observe (Ui, Vi) but we observe the market clearing price and quantity (Pi, Qi) which satisfy Qi =3+Pi/2+Ui, Qi = 5- Pi/2+Vi, for i = I, Consider the special case with umac = O and v = I. Suppose you are given the price P101 for a market not in our sample but not the value of QIOI. The best linear (passive) prediction of QIOI given P101 = 3 under the MSE criterion is Consider the special case umac = 1 and v prediction of P102 given Q102 = 4 is Now suppose Vmaz I. The value of cot'(P. O) is = O. The best linear (passive) Assume that = P103 = 3 is = 2. The best linear (passive) prediction of Q103 given