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1. In 2018, oil price was $71 and consumption was 100 million barrels per day on...

1. In 2018, oil price was $71 and consumption was 100 million barrels per day on average. Assuming the price elasticity of demand was -0.20 and the price elasticity of supply was +0.25, estimate a supply equation for the 2018 oil market:

2. In 2007, the following long run demand and supply equations were estimated for the oil market: QD = 43.6–0.18P and QS = 18.4+0.18P. In 2007, the price was $70. Expanded drilling of oil in Alaska could have increased the supply by approximately 1% in 10 years. Find the new equilibrium price assuming this change in supply, with demand staying constant.

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