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The city's public transportation system should be removed from the jurisdiction of the municipal government, which finds it politically impossible either to raise fares or to institute cost-saving reductions in service. If public transportation were handled by a private firm, profits would be vigorously pursued, thereby eliminating the necessity for covering operating costs with government funds.
The statements above best support the conclusion that

the private firms that would handle public transportation would have experience in the transportation industry
political considerations would not prevent private firms from ensuring that revenues cover operating costs
private firms would receive government funding if it were needed to cover operating costs
the public would approve the cost-cutting actions taken by the private firm
the municipal government would not be resigned to accumulating merely enough income to cover costs

Can someone please comment on answer and explain.

Thanks!

sorry, here are the answer choices more clearly.

a) the private firms that would handle public transportation would have experience in the transportation industry

b) political considerations would not prevent private firms from ensuring that revenues cover operating costs

c) private firms would receive government funding if it were needed to cover operating costs.

d) the public would approve the cost-cutting actions taken by the private firm

e) the municipal government would not be resigned to accumulating merely enough income to cover costs.

Is the Answer (A)

(C) is certainly out as the last statement says that "profits would be vigorously pursued, thereby eliminating the necessity for covering operating costs with government funds."

I don't think it is (B) as there is no reference to any political interventions.

(D) and (E) seems to be out of context.

I am changing my mind.
It looks (B) is more correct. (A) looks more like an assumption than a conclusion.

answer is B .

thanks!

neeshpal, the primary mistake that GMAT students make on "draw a conclusion" or "inference questions" is that they "conclude too much." In other words, students assume certain situations are true, even when these situations are not directly supported by evidence from the text.

The correct answer to a draw a conclusion/inference question MUST rely on this direct support. In fact, it can be beneficial to place the phrase "it is true that..." before each answer choice as you go through your process of elimination. By doing so, you can more easily evaluate whether the stated answer is directly supported by textual evidence.

Hope that helps!
-dan