Problem
Consider the following benefit and cost relationships for mercury abatement
(A): MSB = 30 - 0.3A MSC = 16 + 0.2A
TSB = 30A - 0.15A2 TSC = 16A + 0.1A2
where A is the percentage of mercury abatement and dollar values are in millions.
a. Suppose the mercury abatement level was set at 20 percent for 2003. Are net benefits positive or negative?
b. On the basis of the efficiency criterion, should controls on mercury be tightened or relaxed? Support your response with specific calculations.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.