You Are Responsible for Purchasing 25 Used Cars for Your

Multiple Choice

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
B) Diamond
C) You are indifferent between brands.
D) You don't buy either brand.