Used Car Buyers Believe a Car Is Good Quality When

Multiple Choice

Used car buyers believe a car is good quality when the seller signals the car's quality by offering a warranty because

A) a warranty on a lemon is costly to the seller.
B) warranties are only offered on lemons.
C) the signal cannot be false.
D) adverse selection means that warranties will not be used as a signal.
E) a false signal has no effect on the seller.