Jim has created a Google Search ad with a bid of $5. Two other advertisers in an auction have bids of $2.50 and $2. How much would Jim pay for the first spot in the auction?
5
2.5
2.51
4.5
Choose an option to see if it’s correct. Check the explanation below. Learn Smarter, not Harder.
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Explanation: Jim has created a Google Search ad with a bid of $5. Two other advertisers in an auction have bids of $2.50 and $2. How much would Jim pay for the first spot in the auction?
Explanation: In the given scenario, Jim has created a Google Search ad with a bid of $5, while two other advertisers have bids of $2.50 and $2. In a Google Ads auction, the actual amount paid by the winning advertiser for the top spot is determined by the second-highest bid plus a minimal increment, typically one cent more than the next highest bid. Therefore, Jim would pay slightly more than the next highest bid of $2.50, resulting in a final cost of **$2.51** for the first spot in the auction. This minimal increment ensures that the winning advertiser pays a competitive price while maintaining the integrity of the auction process. Hence, this option is correct as it accurately reflects the amount Jim would pay to secure the top position in the auction, considering the bids of other advertisers.
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