The current world production of oil is 100 million barrels per day and the current world price of oil is $40 per barrel. The price elasticity of demand (e) is -0.5 and the elasticity of supply (n) is 0.4. Kati Investment is planning to enter the world oil market with a daily production of 0.9 million barrels of oil per day. For simplicity, assume that the supply and demand curves are linear a) Use a well labelled diagram to analyze the effect of Kati Investment production on the world price and quantity. b) Use the information provided above to determine the long-run demand and supply functions that are consistent with pre-Kati Investment world output and price. c) Determine the post-Kati Investment long-run linear supply function d) Use the demand function and the post-Kati Investment supply function to calculate new equilibrium price and quantity. e) Explain why the equilibrium quantity increases with less than 0.9 million.