a) The introduction of significant tax incentives for consumers purchasing electric vehicles, as per the new environmental regulation, would likely stimulate an increase in the demand for EVs. When the cost of purchasing an electric vehicle, such as Tesla's, is reduced due to government subsidies, it makes the vehicles more attractive to price-sensitive consumers. This can lead to a shift in the market equilibrium for electric cars, increasing the quantity demanded at the existing market price. As a result, Tesla's vehicle sales may rise as the tax incentives effectively lower the net price for consumers, making the effective price of a Tesla more competitive compared to traditional gasoline-powered cars. Consequently, the demand curve for Tesla vehicles would shift to the right, indicating an increased willingness to buy at the new, lower effective price point.

b) Technological advancements resulting in a more efficient production process at Tesla could lead to lower manufacturing costs, which in turn could allow the company to lower the prices of its vehicles without compromising profitability. A reduction in prices could boost sales, as the cars become more affordable for consumers. If Tesla decides to pass on the cost savings to customers, it could entice even more buyers, potentially shifting the demand curve further to the right, thereby increasing the equilibrium quantity transacted at any given price. Moreover, improved efficiency might also enable Tesla to increase production capacity to meet the potentially higher demand, thus maximizing the benefits of the technological advancements.