Herb's Auction House in Purloined Hubcap, Oregon, Holds Sealed-Bid Used-Car

Herb's Auction House in Purloined Hubcap, Oregon, holds sealed-bid used-car auctions every Wednesday. Each car is sold to the highest bidder at the second-highest bidder's bid. On average, two-thirds of the cars that are auctioned are lemons and one-third are good used cars. A good car is worth $1,500 to any buyer. A lemon is worth only $150 to a buyer. Most buyers can do no better than random at picking good cars from the lot. There is only one exception, Al Crankcase. Al can sometimes but not always detect lemons by means of a subtle test. A good car will never fail Al's test, but approximately half of the lemons fail his test. Al attends every auction, tests every car, and always bids his expected value. Normal bidders bid less than the expected value for a randomly selected car but more than the value of a lemon.

A) Al will bid $825 for cars that pass his test and $150 for cars that fail his test. Normal bidders will get only lemons.
B) Al will bid $750 for cars that pass his test and $500 for cars that fail his test. Normal bidders will get only lemons.
C) Al will bid $500 for cars that pass his test and $150 for cars that fail his test. Normal bidders will get good cars onlyof the time.
D) Al will bid $600 for cars that pass his test and $250 for cars that fail his test. Normal bidders will get good cars onlyof the time.
E) Al will bid $300 for cars that pass his test and $150 for cars that fail his test. Normal bidders will get good carsof the time.