The constraints on LE capital usage imply pricing boundaries on the auction. If LE can only spend $0.40 to burn a single Malt then the largest premium that can be offered is $0.40. The premium is the delta between market price and the dutch auction. In this case a final auction price above $0.60 will always be acceptable as the market price should never go above $1 during an auction (recovery mode avoids user behaviour overshooting).
Final auction prices below $0.6 are acceptable only if they are less than $0.40 away from average Malt purchase price.