Originally Posted by Doctor Dre

I always set my limite a lot higher then the actual CPC cost, that discourages other parties from trying. They see they aren't breaking through and they step down with smaller bids. Everybody wins.

There are some keywords that cost me 2-3$ where I bid 10$. A single day in 2nd place would cost me thousands of dollars in profits so why not.

The price you pay per click has a ton to do with your quality rating, it's exponentially cheaper once you're in the higher rankings.