If you bid $2 for a click and the next highest bid is $1.25, how much will you pay?

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If you bid $2 for a click and the next highest bid is $1.25, how much will you pay?

1.   $1
2. 
   
3.   $1.24
4. 
   
5.   $1.26
6. 
   
7.   $2
8.