Suppose that the state of Connecticut is attempt- ing to set a water quality standard, where water quality is measured as the percent of mercury abated (A), and the marginal social benefit (MSB) and marginal social cost (MSC) of abate- ment have been estimated as follows:
MSB ¼ 40 - 0:1A MSC ¼ 36 þ 0:25A
The state's department of environmental protec- tion sets the standard at 20 percent. Is this standard set efficiently, too stringently, or too leniently? Explain briefly.