Concept of Reserve Price

The buyers want to buy the good and services at the cheapest prices. The sellers want to sell their goods and services at the highest prices. The interaction of these forces in the market comes at equilibrium prices. Sometimes, in the market sellers get lower prices for goods and sometimes they get higher prices of their goods. The minimum price at which are willing to sell serve as a benchmark for them and is referred to as " Reserve Price". Therefore, reserve price is not the market price but is a price where sellers will not want to exhaust their supply. It is sometimes equal to market price and sometimes it is not equal to market price.