Which of the following is TRUE about producers' willingness to offer warranties on products?
(a) Producers are equally likely to offer warranties on high-quality and low-quality goods.
(b) Producers are more likely to offer warranties on low-quality goods, because without the signal that the warranty provides, the low-quality good wouldn't sell.
(c) Producers are more likely to offer warranties on high-quality goods, because the expected cost of repairs is lower for those goods.
Answer: c