Final answer:
The company's strategy of letting customers buy now and pay later is designed to mitigate the pain of payment, which is the discomfort felt when spending money. This can make customers more willing to purchase despite imperfect information in the market, which affects the buyer's ability to assess product quality and overall satisfaction.
Step-by-step explanation:
The company's strategy of allowing customers to purchase a product today but pay for it later is designed to reduce the pain of payment. This concept refers to the psychological discomfort or distress a consumer feels when parting with money. By delaying payment, the immediate discomfort associated with spending money is mitigated, potentially making customers more willing to make a purchase.
Imperfect information in the market can impact numerous aspects of consumer behavior. For instance, buyers might experience regret if they later realize a purchased product doesn't meet their expectations, or they might forgo a purchase altogether if they cannot accurately determine the product's quality. Therefore, offering delayed payments helps alleviate some of the hesitation related to the direct costs of buying.
In terms of assessing the degree of imperfect information for different purchases:
- a. Buying apples at a roadside stand might present a low degree of imperfect information because the product is tangible and can be inspected directly.
- b. Buying dinner at the neighborhood restaurant is likely also lower in imperfect information, given the immediacy of experiencing the meal.
- c. Buying a used laptop computer at a garage sale would have a high degree of imperfect information due to potential hidden defects and lack of warranty.
- d. Ordering flowers over the internet for a friend presents a higher degree of imperfect information because the buyer cannot see the product before purchase, and must rely on the reputation of the seller.