The bid increment is the amount by which a bid will be raised each time the current bid is outdone.  It is bases on the current high bid.  A Bidder may be outbid by less than a full increment if the winning bidder’s maximum bid beats the second highest maximum by an amount less than the full increment.  If you were bidding against another bidder’s maximum bid , your bid would have to meet the other bidder’s maximum bid plus one cent to become the current high bidder on the item.  Below is a chart that shows the bid increments:

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