ECO202: ((Online) Economic Ideas and Models for Business)

Module / Subject / School:

ECO202: (Online) Economic Ideas and Models for Business

Singapore University of Social Sciences (SUSS)

Requirements: 

Read the following news articles to gain some background information for the required analysis in this question.

• Furr, Nathan and Jeff Dyer (2020), ‘Lessons from Tesla’s Approach to Innovation’, Harvard Business Review, 12th February, available:

https://hbr.org/2020/02/lessons-from-teslas-approach-to-innovation

• Shen, Michelle (2022) ‘How much does it cost to make a Tesla? Earnings show reduced costs and high profits’, USA Today, 2nd February, available:

https://www.usatoday.com/story/money/2022/02/01/tesla-production-cost-earnings-report/9298931002/

• Trefis Team (2021) ‘Are Battery Cost Improvements Still A Big Driver Of Tesla’s Margins?’, Forbes, 1st December, available:

https://www.forbes.com/sites/greatspeculations/2021/12/01/are-battery-cost-improvements-still-a-big-driver-of-teslas-margins/?sh=1489a69e4ae7

(i) Do some additional research and discuss two (2) different factors that resulted in shifting Telsa’s demand curve and/or supply curve. Your analysis must include appropriate diagrams to discuss the shifts of demand curve and/or supply curve for Telsa’s products. [Suggested word count: 300 words]

(10 marks)

(ii) Discuss one (1) innovative strategy by Tesla that led to change in the shape (e.g., slope or steepness) of its demand curve over time. Analyze how change in the slope and shifting of Telsa’s demand curves over time may increase or decrease Tesla’s market power. Use appropriate diagrams to support your argument. [Suggested word count: 300 words]

(10 marks)

What we score:

76%

Our Writer’s Comment 

This assignment is designed to assess students’ understanding of business practices.

To secure an A+ grade, adhere to these guidelines and make sure your work aligns with the grading criteria:

Additional Research and Sources:

Make sure you’re not just relying on the articles provided. Go beyond them by finding additional reputable sources to strengthen your analysis. This can include academic journals, financial reports, or case studies on Tesla’s market performance. The more evidence you can provide, the stronger your argument will be. It also shows that you’ve done a thorough analysis, which is key for higher marks.

Shifting of Demand and Supply Curves:

When discussing factors that affect Tesla’s demand or supply, make sure you’re clearly explaining why these shifts happen. For example, if you mention advancements in battery technology lowering production costs (supply curve shift), explain how this impacts Tesla’s ability to supply more cars at lower prices. Similarly, if you discuss increased consumer interest in electric vehicles (demand curve shift), explain the factors driving that interest (e.g., environmental concerns, government incentives).

Use diagrams effectively here. Draw a clear diagram showing the original curve and the shift, making sure the arrows indicate the direction of the change. Label everything clearly so that even someone unfamiliar with economics can follow your explanation. A well-executed diagram can make a big difference in clarity and score.

Innovative Strategy and Demand Curve:

For part (ii), when discussing an innovative strategy, make sure you are very specific. Don’t just say “Tesla innovated in electric vehicles”—you should focus on something more detailed, like their direct-to-consumer sales model or their battery cost reduction strategy. Explain how this innovation affects the slope or shape of the demand curve. For example, if Tesla’s innovation led to more price elasticity, show how the demand curve becomes flatter over time.

Again, diagrams are key. Clearly show how the shape of the demand curve changes due to Tesla’s innovation. A flatter demand curve could indicate that consumers are more responsive to price changes, which can increase Tesla’s market power if handled well.

Linking to Market Power:

In your analysis, make sure you link the changes in the demand curve to Tesla’s market power. Explain how an increase in demand, or a shift in the curve, could reduce competition and allow Tesla to set higher prices or gain more control over the market. Make it clear that these changes aren’t just random—they’re tied to Tesla’s strategic positioning in the market.

Clarity and Structure:

Make sure your writing is clear and concise. These are short sections (300 words each), so avoid overly complex sentences or unnecessary information. Stick to the key points: describe the factors, explain the shifts, show the impact through diagrams, and connect everything back to Tesla’s market power. Keep your writing tight and well-organized.

Strong Conclusion:

Even though this is a short assignment, a brief conclusion can help tie everything together. Sum up how the shifts and changes in demand and supply curves affect Tesla’s overall position in the market. This shows the reader that you’ve thought about the bigger picture and not just the individual components.

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