Check out the stats of one of my clients I am paying an average of cost of $0.27 per click while my competitors are paying an average of $1.35...and conversion rates are quite high I learnt when you carefully manage your adwords campaigns you can end up paying nearly 3 times less than what your competitors are paying
I'm sorry but there is something very fishy about those stats. The first page bid estimate shouldn't be showing if you were bidding at those prices with those average positions...