Why Is Privatization/outsourcing Seen as an Attractive Option for the Delivery

question 36

Multiple Choice

Why is privatization/outsourcing seen as an attractive option for the delivery of public services?

• A) Private companies may deliver services more efficiently.
• B) Private companies may deliver services more equitably.
• C) Privatization increases government's accountability to the public.
• D) Privatization ensures higher employment levels.
• E) Privatization primarily benefits U.S.-based companies.

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Definitions:

Negative Economic Profit

A situation where a firm's total revenue is less than its total costs, including opportunity costs.

Market Price

The current value at which an asset or service can be bought or sold in a competitive marketplace.

Zero Economic Profit

A situation where a firm's total revenue is exactly equal to its total costs, including opportunity costs.

Economic Profits

The excess of total revenues over total costs, including both explicit and implicit costs.