Choice "D" is correct. The implied warranty of merchantability is implied in every sale by a merchant seller. Among other things, it is a warranty that the goods sold are fit for the ordinary purpose for which they were designed. For instance, a chair is designed to be sat upon as its ordinary purpose. If it breaks when a person sits on it that would be a breach of the warranty of merchantability.
Choice "a" is incorrect. The warranty of merchantability does not require that the goods be manufactured using the best manufacturing methods.
Choice "c" is incorrect. The warranty of fitness for a particular purpose covers goods that are sold for a specific purpose.
Choice "b" is incorrect. This answer is too broad. If the goods themselves were in violation of laws or regulations they would not be merchantable. But the mere fact that the manufacturer violated any law or regulation (e.g., wage and labor laws) would not necessarily violate the warranty.