What effect does Gandolf's sign outside Bilbo's door in Chapter 1 have on the plot of The Hobbit? It creates exposition that provides background information on historical burglars.

It creates the rising action by announcing to the rest of the hobbits that Bilbo has agreed to act as burglar.

It creates a complicating incident because it leads the dwarves to think Bilbo has already agreed to join their mission.

It creates conflict by inciting a fight between Bilbo and the dwarves about the burglar's role.