Question

All other things being equal, if you've set a maximum cost-per-click (max. Cpc) bid of $1.00 for your ads, and if the next most competitive bid is $0.50 for the same ad position, what is the actual amount you'd pay for that click?

Answer 1

The Cost Per Click for a person is calculated on the basis of the CPC
incurred by the ad copy above his, in the ad position on the SERP. A person is
charged just 1 cent less than the CPC bid for the ad above him. So ideally a
person should see that the CPCs his keywords incur are lower or almost the same
as the bid he has set for them.