What is an "absolute auction"?

An "absolute auction" is characterized by the fact that the item will be sold to the highest bidder without any minimum price being set. This means that there is no reserve price, and the seller is committed to selling the item regardless of the final bid amount. This type of auction can create a sense of urgency among bidders, as they know the item will definitely change hands as long as there are bids submitted. This approach often attracts more bidders, potentially leading to higher final sale prices due to competitive bidding.

In contrast, the other options describe auction formats that involve specific conditions or limitations on the sale. For instance, auctions that require a starting bid or set a minimum price (often referred to as reserve auctions) do not guarantee that the item will sell if bidding does not reach the predetermined threshold. An auction held on a specific date only pertains to the timing of when items may be sold but does not define the nature of the auction itself in terms of price setting. These aspects highlight why option A is the correct understanding of an absolute auction.