Suppose your company manufactures 3 million hard drives per year specifically for HP laptop computers. Suppose your company's average variable cost is $18 per unit, annualized cost of investment to build a hard drive factory is $12 million and market price (market price in the event HP does not buy) is $20 per unit.

Based on the above information, answer the following questions.

(a) How much is your company's relationship specific investment? (3 marks)

(b) How much is your company's rent if HP agrees to purchase the 3 million hard drives at $25 per unit? (3 marks)

(c) How much is your company's quasi-rent if the deal your company had with HP in part (b) falls apart? (3 marks)