An automobile manufacturer voluntarily recalls certain models to fix a defective part at no cost to the owners. This action has the effect of

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The voluntary recall with no cost to the owners is an example of a manufacturer's warranty, which is a promise by the manufacturer to repair or replace a product that has defects or malfunctions. This is a proactive step taken by the manufacturer to ensure customer satisfaction and safety, and to maintain the company's reputation. The lemon problem refers to the issue of buying a defective product, and a market failure refers to a situation where the market does not allocate resources efficiently.

An Automobile Manufacturer Voluntarily Recalls Certain Models to Fix a Defective