Which of the following is (are) source(s) of economic inefficiency that arise under a monopoly?

I. Since legally protected monopolists can often earn economic profit, government protection of monopoly producers will encourage rent-seeking activities.
II. A monopolist will fail to expand output to the level where the consumer's valuation of the marginal unit equals the producer's cost of producing the unit.
III. Monopoly reduces the ability of consumers to discipline the seller of a product.

Explanation: Monopolies are inefficient because of barriers to entry which imply that monopolists are not subject to the discipline of competition. Since monopolists produce where P > MC, the monopolist does not expand output to the point where the consumer's valuation of the marginal unit equals the producer's cost of the unit. Finally, since there are profits available under monopoly organization, producers will use their resources to lobby politicians to allow them to operate as monopolies.