Auction is a market where price is

by

Auction is a market where price is

set by negotiation between buyer and seller
arrived at by a bidding process
notified by Government
declared by auctioneer
This question was previously asked in
UPSC SO-Steno – 2017
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The correct answer is B. In an auction, the price is determined by a bidding process.
An auction is a type of sale in which goods or services are sold to the highest bidder. The price is not fixed beforehand but is arrived at dynamically through competitive bidding by potential buyers. Options A, C, and D do not accurately describe the primary mechanism of price discovery in an auction. Negotiation might follow in some cases, but the core price setting is via bids. Government notification or auctioneer declaration are not the fundamental price-setting mechanisms.
There are various types of auctions, such as English auctions (ascending price), Dutch auctions (descending price), sealed-bid auctions, etc., but all involve a process where participants make offers (bids) that determine the final price.

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