Consider the following benefit and cost relationships for mercury abatement (A): MSB = 30 - 0.3A, TSB

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Consider the following benefit and cost relationships for mercury abatement (A):

MSB = 30 - 0.3A,

TSB = 30A - 0.15A2,

MSC = 16 + 0.2A,

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. 

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