The following relations describe demand and supply conditions in the lumber/forest products industry

QD = 80,000 - 20,000P(Demand)

QS = -20,000 + 20,000P(Supply)

Where Q is quantity measured in thousands of board feet (one square foot of lumber, one inch thick) and P is price in dollars.

A. Set up a spreadsheet to illustrate the effect of price (P), on the quantity supplied (QS), quantity demanded (QD), and the resulting surplus (+) or shortage (-) as represented by the difference between the quantity supplied and the quantity demanded at various price levels. Calculate the value for each respective variable based on a range for P from $1.00 to $3.50 in increments of 10¢ (i.e., $1.00, $1.10, $1.20, . . . $3.50).

B. Using price (P) on the vertical or y-axis and quantity (Q) on the horizontal or x-axis, plot the demand and supply curves for the lumber/forest products industry over the range of prices indicated previously.