Would you please see if you can provide step-by-step solutions for the problem that I attached?I want to gain a greater understanding of the process so that I can teach myself how to solve similar problems? Thanks

#2 PS7 (MICRO) 2. The government considers buying new submarines for its navy that only firm S is able to deliver. If a quantity r is delivered for a total price t, the government's utility is 10r - 12 - t. S's per-unit cost is either 2 (with probability pr) or 4 (with probability py = 1-PL). S knows its cost, but the government does not. (a) Just for comparison, calculate the optimal contracts to be given to the two types of firms, if the government knew H's cost. (b) Explain the content of the revelation principle in this setup. (c) Write down the government's optimization problem with all 4 constraints. (d) Argue that the participation constraint for the low cost type can be disregarded. (e) Argue that the participation constraint for the high cost firm must bind. (f) Explain which incentive constraint must bind. (g) Solve for the optimal contracts. (h) Compare the quantities for both types to the respective quantities under full information that you calculated above. Explain why they are lower for one type and the same for the other type. (i) Suppose that the contract will be in force for 1 year and that firm S has actually low cost. However, firm S expects that there will be a new contract negotiation next year. Which problems does this generate