In the late $1990$s$,$ car leasing was very popular in the United States. A customer would lease a car from the manufacturer for a set term, usually twoyears, and then have the option of keeping the car. If the customer decided to keep the car, the customer would pay a price to the manufacturer, the"residual value," computed as $60\%$ of the new car price. The manufacturer would then sell the returned cars at auction. In $1999,$ manufacturers lostan average of $$480$ on each returned car $($the auction price was, on average, $$480$ less than the residual value$).$Suppose two customers have leased cars from a manufacturer. Their lease agreements are up$,$ and they are considering whether to keep $($andpurchase at $60\%$ of the new car price$)$ their cars or return their cars. Two years ago, Bob leased a car valued new at $$20,000.$ If he returns the car,the manufacturer could likely get $$14,000$ at auction for the car. Clancy also leased a car, valued new at $$16,500,$ two years ago. If he returns the car,the manufacturer could likely get $$8,250$ at auction for the car.Use the following table to indicate whether each buyer is more likely to purchase or return the car. The manufacturer will lose money $($at auction, relative to the residual value of the car$)$ ifreturns the car instead of keeping andpurchasing it$.$True or False: Setting a more accurate residual price of each car would help attenuate the problems of adverse selection.TrueFalse