1. A monopoly is an inefficient way to produce a product because A. It can earn both short-run and long-run profits. B. It faces a downward-sloping demand curve. C. The cost to the monopolist of producing one more unit exceeds the value of that unit to potential buyers. D. It produces a smaller level of output than would be produced in a competitive market. 2. Patent and copyright laws are major sources of A. government-created monopolies. B. natural monopolies. C. resource monopolies. D. antitrust regulation. 3. Which of the following examples describes an industry that is a natural monopoly A. 1.A firm invents a new product and patents it preventing others from copying it B. 2. The largest firm in an industry has lower average costs than any potential competitors because it can spread its fixed costs over greater output C. A firm successfully lobbies government to stop firms from entering its industry D. A firm buys all of its competitors so that it is the only firm in the market 4. The U.S. government has traditionally handled natural monopolies by a. Using anti-trust law to break up large natural monopolies b. Regulating prices in industries that are natural monopolies c. Requiring that firms in industries that are natural monopolies are state- owned d. Allowing the market to solve the problem without government intervention