Economics (AS & A Level) · Feb / March 2024 · Paper 32 · Question 12
9708Government policies to achieve efficient resource allocation and correct market failure
A government decides to replace a private company with its own company to collect household waste. Why could such action be justified?
- AWaste collection is a public good.
- BCosts of waste collection are bound to be lower if paid out of local taxes.
- CPrivate companies are always less efficient than government companies.
- DPrivate companies might put profits before customer needs.
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Correct answer: D. Private companies might put profits before customer needs.
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