8.3 The demand and supply functions for oil in a small isolated country are Qd = 210 - 1.5p and Qs = -140 + 2p, where p is the price per barrel and quantities are in millions of barrels per year.

a. Use Excel to calculate the quantity demanded and quantity supplied for p = $70, $75, $80, p , $140

(in $5 increments). Determine the equilibrium price and quantity.

b. Use Excel’s charting tool to draw the demand and supply curves you derived in part a and graphically determine the equilibrium calculated in part a.

c. Now, assume that the government imposes a price ceiling of $80 per barrel. Use the spreadsheet from part a to determine the amount of any excess demand or excess supply. How much oil is sold?

d. The government abandons the price ceiling described in part c and imposes a price floor of

$110 per barrel instead. Use your spreadsheet to determine any excess demand or excess supply now. How much oil is sold?