Part A [5 marks] The Austrian School of Economics argues in favour of monopolies, suggesting they incentivize innovation in light of patent laws. Thus, those who are first to market, reap a period of reward through monopolistic control. However, while this may be true, certain inefficiencies are produced in light of monopolistic behavior. Discuss.

Part B [5 marks] Rubbermaid was once considered a premier up-and-coming firm.1 Walmart contacted Rubbermaid, requesting exclusive distribution rights over Rubbermaid's products - thus, Rubbermaid would only sell to Walmart. Rubbermaid rejected this offer and in retaliation Walmart severed all ties with the company. Show what would have happened if Rubbermaid had agreed to Walmart's offer, highlighting why Rubbermaid was reluctant to enter this agreement.

NOTE: Use intuition, math, and graphical analysis in your response to both parts