A customer enters Van's Auto Repair for an estimate regarding repair of his car. Van knows that the true cost of the repairs will be $200. Van also knows, however, that customers don't know for certain how much repairs should cost. Van knows that he will be chosen to do the repairs if he quotes a price of $200, but reasons that if he quotes a price of $600 he will be chosen to do the repairs with probability 0.5, and if he quotes a price of $1,000 he will be chosen to do the repairs with probability 0.25.

A. Assuming that Van's reasoning is correct, what is the repair price quote that will maximize Van's expected profits from the repairs?

B. If Van charges the amount you determined in A, does this create deadweight loss? Carefully explain.