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Suppose that the mathematical functions representing benefits and costs of water quality policy were estimated as:...

Suppose that the mathematical functions representing benefits and costs of water quality policy were estimated as:

MSB = 40 – 0.8A MSC = 10 + 0.2A TSB = 40A – 0.4A2 TSC = 10A + 0.1A2 where A is the percentage of pollution abatement and the benefits and costs are measured in thousands of dollars.

Answer each of the following showing your mathematics and providing an economic explanation for each of your solutions. a. Determine the range of abatement within which water quality policy achieves positive net benefits. b. Find the efficient level of abatement.

Math   Advanced-Math   
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