Which of the following best describes a "reserve price" in auctions?

A "reserve price" is best understood as the minimum price that a seller is willing to accept for an item being auctioned. This concept protects the seller by ensuring that if bidding does not reach this predetermined threshold, the item will not be sold. The seller sets the reserve price ahead of the auction, and if bidding ends below this value, the seller can choose not to complete the sale.

For instance, if a seller wants to ensure they receive at least $100 for an item, they may set a reserve price of $100. Bids will continue until the reserve price is met, at which point the seller is obligated to sell the item to the highest bidder, provided the bids surpass this minimum threshold. This mechanism is a common practice in auctions as it allows sellers to protect their interests while still engaging buyers in the bidding process.