How does offering a warranty signal product quality in a market with information asymmetry?

• A. It indicates that the seller is confident in the product's quality and willing to bear the cost of potential defects.
• B. It shows that the seller is trying to deceive the buyer.
• C. It suggests that the product is likely to have defects, hence the need for a warranty.
• D. It implies that the product is overpriced.

Answer: (A)