Explain the effect of auctions held with reserve and without reserve,and discuss what happens if nothing is said regarding whether an auction is being held with reserve or without reserve.

In an auction held with reserve,the seller is merely expressing an intent to receive offers.The auctioneer may withdraw the item from auction at any time before the auctioneer's hammer falls signaling the acceptance of the bid.In an auction held without reserve,the seller is treated as making an offer to accept the highest bid.Thus,the seller must accept the highest bid.If nothing is stated to the contrary in terms of the auction,an auction is presumed to be with reserve.