Like others, I switched my answer from D to C in the blind review and have trouble seeing why C is incorrect (and D correct). Since the argument states that "despite widespread concern over the economic effect this ban would have on the local fishing industry..." couldn't we say the economic impact of the ban (loss of jobs, depressed income, etc.) would thus be a negative impact on public welfare? More clearly, failing to enact the ban could have a positive effect in that the local fishing industry would no longer be a problem of "concern." The failure to properly weigh the positive effects (economic growth thanks to local fishing industry) vs negative effects (public health) sounds right to me, making C the more suitable answer....
I also chose C, but after reviewing the above posts in this thread and re-evaluation of the argument, this is my take. I also thought that the "positive effects" in the argument were implied, but you can't extrapolate the potential "positive effects" of what happens after the bill is enacted. As wjoanna stated above, the argument doesn't state anything about positive effects, just negative effects (i.e. "concern over the economic effect," "grave effects on public health").
You can't guess that the "economic impact of the ban" would have a negative impact on public welfare simply because the question stem asked you what the
method of reasoning was. Likewise, you also cannot extrapolate that "economic growth thanks to local fishing industry" will happen. The correct answer for Method of Reasoning question stems reflect what was stated in the argument only.