Hey Brian - thanks for posting, and welcome to the Forum!
Tricky question here for sure, but let me see if I can clear things up for you
Since it's a Resolve the Paradox question, let's start by precisely identifying what the paradox in the stimulus is. First, we're told that this new, undetectable antitheft device greatly increases the odds of catching even the most experienced thieves; in other words, steal a car with this device inside—which you can't know in advance—and you're taking a substantially greater risk than if you stole a car without it. Second, we're told that even though most people don't use the device, where there's some chance that it
is being used (cities where some people are using it) auto thefts have dropped dramatically.
And there's the conundrum: why have auto thefts dropped so much in places where there's a possibility, however slim, that a thief inadvertently (unwittingly) steals a car with this device and is thus far likelier to be caught? How is this invisible and rare device proving to be such an effective deterrent?
So this is really about risk management. Thieves are clearly hedging their bets, so to speak, by not taking any chances (however remote) where they know they're most likely to steal an "unlucky" (deviced) car, and thereby get apprehended.
Answer choice (C) does nothing to resolve this issue, because the rate of apprehension before the device is irrelevant to the change in behavior after the device goes into use. In fact, if anything it makes the paradox even greater! I'll explain. If historically most people who stole cars with antitheft devices have gotten away with it, and a new antitheft device gets introduced (and not in any widespread/mainstream way), what's the likely response? Sudden concern and a huge change in behavior? No way! Quite the opposite: "Oh how cute, a new antitheft measure. Been here before...silly cops." Confidence doesn't lead to a dramatic change in practice at the first sign of familiar trouble, but rather encourages someone to expect the same outcome they've always gotten and proceed accordingly.
(C) would have been a far better answer if it had said basically the opposite of what it tells us: "In the past when antitheft devices have been used, there has always been a high, and well-documented, apprehension rate." Now that would explain why thieves are so timid in the potential presence of this new one!
So what about (E)? Consider what it would mean if only a few
very experienced car thieves—meaning they're good at getting away with it and really know what they're doing—commit the majority of car thefts, and suddenly in a few scattered cities a new, undetectable, extremely-problematic (for the thief) device gets introduced. What would an experienced thief do in the presence of such a threat? Continue to steal cars in those areas same as before? Doubt it. Instead, they'd cut their losses and find other activities to engage in, or target areas where the chances of encountering that new device are lower (or non-existent). And that in turn explains why cities with owners using the device have seen a decrease in thefts.
Again, tricky question with some challenging answer choices, but hopefully that helps you make more sense of it!