You are responsible for purchasing 25 used cars for your company. Star Brand cars costs $7,500 and Diamond Brand cars cost $6,000. Based on experience, you believe that 20% of Star Brand cars are lemons (low quality) while 40% of Diamond Brand cars are lemons (low quality). You are willing to pay $5,000 for a known lemon and $12,000 for a known plum. Which brand do you purchase?
A. Star Brand
B. Diamond Brand
C. You are indifferent between brands.
D. You don't buy either brand.
Answer: B
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