As a result,in their own self-interest,producers of low-quality items will not offer extensive warranties. Thus consumers can correctly view an extensive warranty as a signal of high quality,and they will pay more for the warranted products. The situation is called market signaling.◼ As a result, in their own self-interest, producers of low-quality items will not offer extensive warranties. Thus consumers can correctly view an extensive warranty as a signal of high quality, and they will pay more for the warranted products. ◼ The situation is called market signaling