It is often the case that a seller can increase his profit from an auction by setting a reserve price even if he has to destroy the object being auctioned if nobody bids as high as the reserve price.

Question

Quizplus · Accepted Answer

By setting a reserve price, the seller ensures that the object will only be sold for a certain minimum amount. If the highest bid does not reach this reserve price, the seller can choose to keep the object or destroy it, but either way, they did not sell it for less than their desired price. This allows the seller to potentially increase their profit by setting a reserve price.

It Is Often the Case That a Seller Can Increase