what is reserve price in auction

A reserve price is the minimum amount that a seller is willing to accept as the winning bid in an auction. It is also known as a reservation price. The reserve price is set by the seller and is not typically disclosed to potential buyers. If the highest bid does not meet or exceed the reserve price, the seller is not required to sell the item, even to the highest bidder. The reserve price serves as a safety net for sellers to ensure that high-value items are not accidentally sold below their worth. The reserve price can be disclosed in the item description or upon request from potential buyers. Some auction bidders dislike reserve prices because they reduce the possibility of winning the auction at a bargain price and create uncertainty as to the minimum price that must be paid to win the auction.