What does the term "hammer price" refer to?

The term "hammer price" refers to the final bid accepted by the auctioneer at which the item is sold. This terminology originates from the practice of auctioneers using a gavel or hammer to finalize a sale. When the auctioneer determines that the highest bid is acceptable and brings down the gavel, this act signifies that the item is sold at that bid amount. Understanding the concept of hammer price is crucial for participants in an auction, as it determines the price at which a transaction is formally completed, and it also influences things like buyer's premiums and seller's commissions.

In this context, the other choices describe different aspects of the auction process but do not properly define hammer price. For example, the starting bid is not the final sale price; it's simply the initial bid to begin the auction process. Similarly, the total amount collected after an auction refers to the overall sales revenue, which can include multiple items and their individual hammer prices combined. Lastly, the price set by the seller before the auction does not apply to the hammer price, as it pertains to a reserve price or starting bid but not the final selling price that results from the bidding process.