Why does this announcement affect the world supply curve

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It has just been announced that large deposits of oil have been discovered in Chile. It will take five years for production to begin, but after that time Chile will become the world's largest oil producer by a large margin.

a. How and why does this announcement affect the world supply curve for oil in the period before Chile's production comes online?

b. How and why does this announcement affect the world demand curve for oil in the period before Chile's production comes online?

c. Based on your answers to parts a and b, what can you say about what will happen to the world price and quantity of oil consumed in the period before Chile's production comes online?

Reference no: EM131161393

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