Which statement does not apply to auction price determination?

The statement regarding auction price determination that does not apply is that all existing market orders are executed. In an auction process, the execution of market orders isn't guaranteed in every scenario. Instead, the auction is designed to determine a single clearing price based on the interaction of buy and sell orders during that specific event.

In typical auction mechanics, the process involves identifying a price at which supply equals demand, allowing for the matching of orders. While market orders do play a role in this process, it is not necessarily the case that every existing market order will be executed. Some market orders may remain unfilled if there isn’t a corresponding limit order at the determined auction price, or they may not be prioritized as further adjustments occur.

The other statements accurately reflect the principles of auction price determination. For instance, the best bid limit being lower than the best ask limit indicates the normal functioning of a market where the highest price a buyer is willing to pay does not exceed the lowest price a seller is willing to accept. The auction price being set between these limits aligns with the rules of price determination, ensuring market efficiency. Additionally, market orders usually have a priority in execution over limit orders, which establishes a clear mechanism for addressing orders based on their type.