Q1a. Do some extra research and discuss 2-3 core innovation strategies of the entrepreneur ( la Elon Musk) at Tesla that led to the capture of market demand and cost advantages, and hence a profitable result in recent years.

(max 600 words is the suggested amount for Part 1a] Total of 5 marks for quality of discussion in Part 1a)

Q1b. Explain in some detail how Tesla made a profit in 2021. To prepare for this task, you will do the following: illustrate using an appropriate diagram* of Tesla's market power in setting its price to maximise profits; use a combination of actual and hypothetical values (rough guesses) for the prices, quantities and costs, relying on intuition and good judgement.

(HINT: As a suggestion, assume the profit-maximising point is equivalent to the average selling price of Model 3 sedans. A sound answer describes relevant aspects related to the diagram (e.g., markup, producer surplus etc.); and includes real world data on price, cost and profit within the discussion. [MAX 400 words for Part 1b] 5 marks for diagram + 5 marks for quality of analysis = Total of 10 marks for Part 1b)