The exchanges purchase a bulk lots of Bitcoin that they can sell on there exchange, or do they have a list of traders/wallets willing to sell that they transact with when I click the buy button?
Exchanges don't need to purchase or sell BTC in their exchange. It's you, me & other people who want to buy sell bitcoin.Quote
Do the miners somehow set a 'reserve' price at which they are willing to sell, or is the price of one BitCoin defined somewhere else by someone else?
Price isn't set by any single party, it's the same as I mentioned above; the traders. Imagine, I want to sell BTC @ $8000, if someone places an order of buying BTC @ $7600, the current price will be @ $7600Quote
How do the various exchanges determine the price? Whats to stop one exchange selling at $5000 and another for $3000? How do they synchronise their pricing and why do they differ slightly?
Again, it's the trader who determine the price; see 2nd quote. For your info, price in all exchanges are never same & it's because of the market participants. For instances, I use Binance. I may place a buy order @ $7500- the price in Binance will be $7500, while in Bittrex, another buyer may place an order @ $7800- the price in Bittrex will be $7800; people sometimes take this advantage- it's called arbitrage trading. Buying lower in an exchange & selling in another exchange for higher price.In the below image, all the green prices are bid price. The highest one will be counted as the current price.
Binance Price- $7505
Bittrex Price- $7500
Take this market same as stock market. Traders (buyers & sellers are the price determiner).
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