Which statement best describes a service-based model in the circular economy?

• A. It monetizes function through product-as-a-service, promoting ongoing service and durability.
• B. It monetizes product ownership by selling units.
• C. It emphasizes disposal after use.
• D. It focuses on selling a product with no ongoing service components.

Answer: (A)

In a circular economy, value is derived from keeping a product’s function alive rather than selling it outright. A service-based approach reframes ownership: the provider monetizes the use or function of a product through a product-as-a-service arrangement, taking responsibility for maintenance, upgrades, and end-of-life recovery. This keeps the product durable and repairable, motivates design for longevity, and enables easier reclamation of materials when the service ends. That’s why the statement about monetizing function through product-as-a-service best describes this model.

The other ideas describe traditional ownership or disposal-focused approaches, which don’t align with the service-oriented, longevity-promoting mindset of the circular economy.