Context: An individual firm in a perfectly competitive market sees the demand curve for its product as a horizontal line, at the market price level. The challenge confronting the perfectly competitive firm is not to set the right price for its products, but to choose its output level so that it makes as much profit as it can at the price set by the market. Oligopoly is the industry structure in which a small number of large firms supply the entire market. Oligopolists may produce either standardized products or differentiated products. In contrast to the perfectly competitive firms which are facing demand curves that are horizontal at the prevailing market price, firms in imperfect competitive markets are facing downward-slopping demand curves. Price discrimination is the practice of charging different buyers, different prices for the same good or service. As you know, a monopolist who can charge each buyer exactly his or her reservation price along the downward-slopping demand curve is maximizing its efficiency. For a real market example, an analyst noted that "[in the Model 3, Tesla managed to engineer an economist's dream: a near-perfect demand curve. It was launched in 2016 as a $30,000 car. But with demand far outstripping any reasonable supply for years, the company smartly pegged starting prices at almost double that level by prioritizing production of fancier, more high-end configurations." In a similar vein, Uber's business model is designed to match ride prices with actual current demand, with prices sometimes double or triple at times of high demand (from personal experience, Logan to Cambridge can range between $25 to $551..). At the same time, another airport route, Sarasota Airport to Venice FL is almost always in the narrow range of $40 - $45... Questions: Competitive firms versus Oligopolies: Are Uber and Tesla oligopolists? Explain why or why not. Are they price takers or price makers? Explain why. Once you establish if they are part of a competitive market or part of an oligopolistic market, discuss the way Uber and Tesla are setting the price for their customers: Does Uber price segregate among customers? Does Uber price segregate geographically? If yes, how does it work and what is the reason behind it? Look at the type of car models that Tesla is manufacturing and examine the way such models are marketed and sold. What kind of price policy is Tesla employing? Talk about the reservations policy, price discrimination, past or current governmental subsidies.Is it likely that Tesla would continue to attract enough consumer demand amid the strong competition from traditional automakers? Talk about what is differentiating Tesla's products, if anything, from its competitors - standardized product or non-substitutional (highly differentiated) product