Competition for the Currently Available Supply of Locations and Space

question 15

Multiple Choice

Competition for the currently available supply of locations and space coupled with the existing supply of leasable space, determines:

• A) the current level of rental rates for each submarket and property
• B) the riskiness of the expected cash flows of an income-producing property
• C) the timing of the expected cash flows of an income-producing property
• D) the cost of financing the purchase of a property

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Definitions:

MC

Marginal Cost, the cost of producing one additional unit of a good.

ATC

Average Total Cost, which is the total cost of production divided by the quantity of output produced.

AVC

Average Variable Cost; the per unit variable cost associated with producing a good or service.

AFC

Average Fixed Cost; the total fixed costs of production divided by the quantity of output produced, illustrating how fixed costs spread out over produced units.