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There is a great deal of concern about heating oil in the Northeast.  Your job is to write a brief  paper developing and using a model of the heating oil market.  Fortunately, much of the data collection has already been done for you.

The Petroleum Institute has developed a supply equation that relates the quantity supplied to the price of heating oil (P)  and the price of crude oil (PC).  The equation is:

            Q = 100 + 25P-1.9PC

The enclosed data has been collected from different areas of New England over the past few years.  You should be able to use this data to develop a demand equation.

Once you have developed your model use it to examine:

• the impact of OPEC increasing the price of crude oil  from  $60  a barrel to as much as $80 a barrel;
  

• the impact of a 10-20% increase in heating degree       days;
  

• a worst case scenario involving the above two impacts;
  
  

• a best case scenario.