In economics, what term describes the minimum price a seller will accept for a particular good?

In economics, the minimum price a seller will accept for a particular good is called the seller’s reservation price.

This reservation price represents the seller’s willingness to accept. It may depend on production costs, the value of alternative uses for the product, storage costs, expected future prices, and the seller’s bargaining position. A transaction is possible when a buyer’s maximum willingness to pay is at least as high as the seller’s minimum acceptable price.

The same phrase can create confusion because reservation price is also used for a buyer’s maximum willingness to pay. Context determines which side of the market is meant. In auction theory, a seller may set a reserve price, a publicly stated or hidden threshold below which the item will not be sold; that reserve can reflect the seller’s reservation price but is not always identical to it.

The concept helps explain mutually beneficial trade: the gap between the buyer’s and seller’s reservation prices can create gains from exchange.