How do cost-per-click (CPC) ads compete with cost-per-thousand impressions (CPM) ads on the Google Display Network?

131) How do cost-per-click (CPC) ads compete with cost-per-thousand impressions (CPM) ads on the Google Display Network?

   A)  CPC bids are effectively coverted to CPM bids
   B)  CPM bids are effectively coverted to CPC bids
   C)  Ads using CPC bids are not allowed to compete on the Display Network

   D)  CPC and CPM bids only compete against bids of the same type