Which of the following is the least efficient method of allocating import licenses by the government?

If a regulatory board wanted to make sure that a natural monopoly earned a normal rate of return, it should set price which is equal to: a. marginal cost

b. average fixed cost. c. average variable cost. d. average total cost.

A binding price ceiling (i) causes a surplus. (ii) causes a shortage. (iii) is set at a price above the equilibrium price. (iv) is set at a price below the equilibrium price

a. (ii) only b. (iv) only c. (i) and (iii) only d. (ii) and (iv) only