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The bid and the ask price are simply the prices that buyers and sellers are offering to buy or sell a good.
The bid is how much someone is willing to pay for a good and the ask is hom much someone is willing to sell a good for. If the bid is higher than the ask then the sale takes place and and if the bid is lower than the ask then the buyer is offering the seller less than he or she wants. Unless the two negotiate different bid/ask quotes then the deal won't occur. Sometimes you have market makers that will cover the spread or difference between then bid and ask and assist the transaction out of the markermakers own inventory to keep a market liquid - that is deals flwoing smoothly.
Bids and asks differ based on supply and demand of good and services and based on people's personal preferences. So a bid might be lower than an ask of the buyer (bid) wants to purchase the good for more than the seller (ask) is asking for the good.
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