GMAT Critical Reasoning (CR) | Re: In one-round sealed-bid auctions, each prospective buyer

In one-round sealed-bid auctions, each prospective buyer submits in strict confidence a single bid, and the sale goes to the highest bidder. A reserve price - a minimum price below which there will be no sale - can be set by the seller as the protection against a token bid, which is an unreasonably low bid sometimes made by a bidder who gambles that there will be no other bid. Paradoxically, such protection is most needed when extremely desirable items are auctioned off this way.

Which of the