When someone clicks your ad, the actual amount you’re charged will be:
Correct Answer
The minimum needed to hold your ad position, under the maximum cost-per-click (max. CPC) limit
Why is this the correct answer?
When someone clicks your ad, the actual amount you are charged is the minimum needed to hold your ad position, under your maximum cost-per-click (max. CPC) limit. This is known as the actual CPC, determined by the Ad Rank of the advertiser below you divided by your Quality Score, plus one cent. You will never be charged more than your max. CPC bid, but you will often pay less — only what is required to maintain your position over the next competitor. This auction-based pricing ensures you pay a fair, competitive rate rather than always your maximum bid.
Why are the other options wrong?
The minimum needed to hold your ad position or 50% of your maximum cost-per-click (max. CPC) bid, whichever is greater
There is no rule that you pay the greater of the minimum needed or 50% of your max CPC — actual CPC can be well below 50% of your bid if competition is low.
The minimum needed to hold your ad position but never less than 50% of your maximum cost-per-click (max. CPC) bid, whichever is greater
The actual CPC is never fixed at a percentage floor of your max CPC bid — it fluctuates based on the competitive landscape of each individual auction.
The minimum needed to hold your ad position but never more than 120% of your maximum cost-per-click (max. CPC) bid, whichever is greater
There is no 120% cap on actual CPC relative to max CPC — Google guarantees you will never be charged more than your max. CPC bid, not a percentage above it.
Real-world example
An advertiser sets a max CPC of £2.00 for the keyword accountant London. In most auctions the next competitor's Ad Rank requires only £0.87 to beat, so the actual CPC charged is £0.88 — saving 56% compared to the max bid while maintaining the same ad position.
Official documentation: https://support.google.com/google-ads/answer/6297
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About the Google AdWords Fundamentals Exam (Retired)
The AdWords Fundamentals exam was retired when AdWords became Google Ads.
Exam guide and all 140 AdWords Fundamentals (Legacy) questions →Related AdWords Fundamentals (Legacy) questions
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