#1 - Powell: Private waste-removal companies spend 60 percent of what public waste-removal companies

[Administrator]

Complete Question Explanation

Point at Issue Questions—Numbers and Percentages, Cause and Effect. The correct answer choice is (B).

Answer choice (A):

Answer choice (B): This is the correct answer choice.

Answer choice (C):

Answer choice (D):

Answer choice (E):

This explanation is still in progress. Please post any questions below!

[parytownson]

Hello Powerscore Team,

I believe I understand correctly why answer choice (B) is correct for this question. Namely, Freeman's criticism of Powell's conclusion is that its unjustified to think private companies are more efficient in waste removal than public companies because public companies lack the freedom to exclude high cost customers that contributes to spending more than their private counterparts. As such, Freeman is taking issue with Powell's failure to assess the reason for private companies to be "more efficient."

Now, I chose answer choice (A) because I initially thought this answer choice was saying that Freeman took issue with the 60% figure because Powell was not taking into account the reason for why this is the case. But as I review this problem, answer choice (A) seems to be instead saying that Freeman is disagreeing with the figure of private companies spending 60% of what public waste-removal companies spend per customer. Freeman is not saying he/she disagrees with the accuracy of this figure. Rather, the reasons for why this figure exists is what Freeman finds problematic.

Is this a correct analysis of these two answer choices?

Thank you in advance, Powerscore Team.

[Robert Carroll]

pary,

That sounds perfect. The 60% number is something they both agree is true, so answer choice (A) can't be a point at issue. They disagree sharply on how to interpret that 60% number, though, because Freeman thinks it's an artifact of selection bias. I think that's exactly what you said!

Robert Carroll

[JPConstantine]

Wanted to clarify why E is incorrect:

Based on what I understand, Powell and Freeman are disagreeing over why private companies are more efficient. Moreover, that private companies can pick their clients, while public companies cannot. Thus, they are not more efficient, they just have the ability to pick clients that are most suitable to them.

E is incorrect because the disagreement is not over the needs or cost of any particular client.

Was struggling to exactly articulate why E is incorrect and was wondering if someone else would be able to explain?

[Jeff Wren]

Hi JP,

Just to clarify, Powell and Freeman are disagreeing over whether or not private companies are more efficient than public companies rather than why they are more efficient.

Powell points out that the private companies spend 60 percent less per customer than the public companies while offering equal or better service. This is (presumably) a fact and is not disputed by Freeman.

Based on this fact, Powell concludes that the lower amount spent per customer must be due to the private companies being more efficient (meaning that these companies can do the same amount of work using less resources such as time, money, materials, labor, etc.).

Freeman offers a different explanation for why the private companies are able to spend less per customer. According to Freeman, it's not because the private companies are more efficient, but because they can (and do) choose to serve only the "easier" customers that cost less to serve.

Answer B correctly describes this point of disagreement. Powell thinks the reason is the private companies are more efficient, and Freeman thinks that it is just because the private companies select the easier/less costly customers.

Answer E is describing the relationship between the needs of the customer and the cost to serve that customer. (For example, the more waste that a customer needs removed, the more that it costs for the company to remove it.)

This topic is specifically mentioned by Freeman but is not mentioned by Powell. It would be a mistake to assume that Powell would disagree with Freeman on this point. Powell may simply be unaware that the private companies are choosing not to serve the customers with the higher (more costly) waste removal needs.