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【单选题】
The service life of a washing machine depends on the quality control of the manufactuer. If the manufacturer makes effort e1 to monitor the production process, the probability of breakdown is 1-e1. The cost of the effort is . Assume there is no other cost of production. Consumer's willingness to pay for a good status washing machine is r=1000 rmb. 1. Investigating the behavior of the manufactuer, which of the following statement is NOT true?A.
Without any guarantee policy, the manufactuer has no incentive to exert effort, so that e1=0
B.
Without any guarantee, there is no market for the washing machine.
C.
If the manufactuer offers a full warranty to consumers, he has incentive to exert the maximum effort level so that e1=1.
D.
Under partial warranty, the manufactuer exerts lower effort than in the case of full warranty.
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