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A few examples should clarify how it works.
An auction offers 100 frammises at a minimum bid of $5.00. Bidder X bids $8.00 each
for quantity 10. Bidder Y bids $7.00 each for quantity 20. Bidder Z bids $6.00 each
for quantity 50.
All of the bidders together request 80 items, so everyone gets what they wanted. Each bidder
pays $5.00 per item.
If Bidder Z requests quantity 70 instead of 50, all of the bidders together request
100 items, the exact number offered. Everyone still gets what they wanted, and each bidder
still pays $5.00 per item.
If Bidder Z requests quantity 75, all of the bidders together request 105 items, so there
aren't enough to go around. Bidder Z, as the low bidder, gets only 70. Now the lowest successful
bidder's bid kicks in. Everyone pays $6.00 per item (Bidder Z's bid).
Suppose Bidder X bids $8.00 each for quantity 50,
Bidder Y bid $7.00 each for quantity 50, and Bidder Z bid $6.00 each for quantity 50.
Now Bidder Z gets nothing. Bidders X and Y each get 50 items at $7.00 each,]
the bid of the lowest successful bidder, Bidder Y.
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