A delivery company is purchasing a pre-owned electric delivery van. The manager is choosing between two vans of the exact same make, model, age, and mileage. They differ only in price and the battery health warranty provided by the seller:
| Purchase Price | Battery Warranty | |
|---|---|---|
| Van X | £15,000 | None (sold "as-is") |
| Van Y | £19,500 | 36-month performance guarantee |
Based on this information, which one of the following is the most likely explanation for the company's decision to purchase Van Y?
The company is operating under a strict capital expenditure limit of £15,000.
The company is acting rationally to mitigate the financial risks associated with asymmetric information.
The company assumes that pre-owned commercial vehicles are Veblen goods.
The company has a highly price-elastic demand for electric delivery vehicles.
45 exam-style questions on AQA A Level Economics 1.2 Individual economic decision making (A-level only), covering 1.2.1 Consumer behaviour, 1.2.2 Imperfect information, 1.2.3 Aspects of behavioural economic theory, and 1.2.4 Behavioural economics and economic policy. Each one has a worked solution and a mark scheme showing where the marks go.