Profit Motive in Public Services

Steps:

• Identify the context: Government replaces private waste collection, a public service essential for health and environment.
• Analyze choices: Focus on reasons for intervention, like efficiency, costs, or priorities.
• Evaluate D: Private firms prioritize profits, potentially neglecting reliable service for households.
• Confirm: This aligns with economic rationale for nationalization in utilities where profit conflicts with public needs.

Why D is correct:

• Ties to market failure theory: Private firms in natural monopolies like waste collection may underprovide due to profit maximization over social welfare.

Why the others are wrong:

• A: Public good justification is vague and doesn't specify profit-customer conflict.
• B: Tax funding doesn't guarantee lower costs; private operations can be cheaper without regulation.
• C: Efficiency isn't inherently lower in private firms; evidence shows variability, not a rule.

Final answer: D