# 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?

Below is the answer and explanation for 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.
• \$4.50.
• \$2.50.
• \$2.51. ✅

\$2.51. ✅

## Explanation

Jim would pay only \$2.51 for the first spot in the auction. In a standard second-price auction based only on bids, the advertiser doesn’t have to pay their full bid. They only have to pay \$0.01 more than the amount of the next highest bidder.

Given above is the answer and explanation for the question 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?

Source : Krcmic.com

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