What is an absolute auction?

An absolute auction is characterized by the phrase "without reserve," which means that there is no minimum price set before the auction begins. In this type of auction, the property will be sold to the highest bidder, regardless of the price that bidder is willing to pay. This creates an environment where bidders can potentially acquire property at a lower price, as sellers are compelled to accept the highest offer, irrespective of whether it meets their own expectations for value.

In contrast to this, other auction types may involve certain conditions. For instance, an auction with a reserve means that the seller has the right to set a minimum price which must be met before the property can be sold. Bidding withdrawal options can also affect the dynamics of the auction but are not characteristics of an absolute auction. Similarly, requiring a minimum bid to start confines the bidding process to a preset range, which does not align with the absolute auction’s open and unrestricted selling format. Thus, option C accurately captures the essence of an absolute auction as it directly reflects its fundamental principle: the commitment to sell to the highest bidder without reservation regarding price.