This post offer some helpful info on the AdWords auction. If you've questions about how AdWords auction works, a great place to start is with the introductory video below from Hal Varian, Google's Chief Economist.
One of the most important factors in deciding your ad's position within the auction is its Quality Score. To learn more about how Quality Score is defined, and how to improve it, you can visit Search Ads Quality Getting Started Guide. Finally, if you'd like to understand how bidding can affect your ad's performance in the auction, you can use bid simulator. It'll provide you with click, cost, and impression data estimating how your ad could have performed over last seven days had you used a different bid.