What does "reserve price" mean in auction terms?

In auction terminology, the "reserve price" refers to a minimum price set by the seller that must be achieved for the item to be sold. This concept is crucial for sellers who have certain monetary expectations for their items and want to ensure they do not sell at a price lower than what they are willing to accept. If the bidding does not reach the reserve price, the item may not be sold, allowing the seller to retain their property. This mechanism protects the seller's interests and provides a level of assurance about the minimum outcome they can expect from the auction.

The other options describe different aspects of the auction process. The final price agreed upon after the auction ends refers to the sale price agreed upon between the winning bidder and the seller, while the starting bid price is the initial bid offered at the beginning of the auction. A price determined by the auctioneer can also relate to other auction practices but does not specifically define a reserve price. Understanding the reserve price is essential for both sellers and bidders to navigate the auction environment effectively.