The Subject of an Appraisal Has Only Two Bedrooms, but One

question 11

Multiple Choice

The subject of an appraisal has only two bedrooms, but one of the comparables used in the appraisal has three. If the adjustment for a third bedroom is $5,000, the adjustment would be:

• A) A $5,000 increase to the comparable's selling price
• B) A $5,000 decrease to the comparable's selling price
• C) A $5,000 increase to the subject's selling price
• D) A $5,000 decrease to the subject's selling price.

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Definitions:

Concentration Ratio

A measure used in economics to assess the market share of the largest firms in an industry to determine the level of competition.

Monopolistically Competitive

Refers to a market structure where many firms sell products that are similar but not identical, allowing for elements of both competition and monopoly.

Demand Schedule

A table showing the quantity of a good or service that consumers are willing and able to purchase at various prices.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, indicating the profitability of a business beyond basic financial gains.