Please help in showing solution for item 4 only. Thanks a lot.

profit-maximizing choice of wholesale shifts to: P =90 - Q. Each retailer can price w? provide the required services at a total cost of $400. 2. Suppose in problem 1 that Volvo operates ABC decides now to implement an the dealership itself and sells directly to its a. RPM agreement with retailers. Under customers. this agreement, what retail price should a. What will be Volvo's profit-maxi- ABC specify? How many units will mizing price p? What will Volvo's retailers sell at this price? profit be? Compare your answer to the answer you worked out in 1(b). Give b. What is consumer surplus under the an intuitive explanation for why the RPM agreement? answers differ. 5. Under the RPM agreement and the price b. Suppose instead that Volvo can impose specified in 4(a), what is the maximum an RPM agreement on its independent wholesale price that ABC can set? What retailers. Will Volvo set a maximum or will its profit at this wholesale price be? Did minimum retail price? What price will adoption of the RPM agreement improve Volvo actually set? social welfare? 3. ABC, Inc. is a monopolist selling to 6. A significant number of the resale price competitive retailers. It faces a constant maintenance cases that have been the sub- marginal cost of 10. Demand at the retail ject of antitrust policy involve the pricing of level is described by P = 50 - Q. such simple consumer products as Russell a. What wholesale price will maximize Stover candy, Levi's jeans, Arrow shirts, ABC's profit? What retail price will and Colgate toiletries. Who has the incen- this imply? tive for resale price maintenance for these b. What will be the value of consumer sur- products? Explain why. plus if ABC sets a profit-maximizing wholesale price? 7. In the antitrust case Albrecht v. Herald c. What will be the value of ABC's max- Co., the successive monopoly problem imum profit? was created by the publisher granting an exclusive territory to the distributor. Could 4. ABC is still a monopolist selling to com- the problem have been solved by opening petitive retailers but it now discovers that if up home delivery to competition among retailers supply customer services, demand several distributors