The Method Based on the Premise That the Buyer Will

question 20

Multiple Choice

The method based on the premise that the buyer will not pay more for a property than for a the expense of constructing a comparable property with the same utility is:

• A) the market approach
• B) the income approach
• C) the cost approach
• D) the buyer approach

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Definitions:

Marginal Cost

The cost associated with producing an additional unit of a product or service.

Diminishing

Refers to a reduction or decrease over time.

Marginal Product

Marginal product refers to the additional output resulting from using one more unit of a production input, holding all other inputs constant.

Fixed Costs

Costs that remain consistent regardless of production or sales volume, including rent, salaries, and insurance fees.