A woman buys a small house in a highly desirable neighborhood consisting of large homes and pays $390,000. A man buys a nearly identical house in a neighborhood of similarly sized homes and pays $290,000. What economic principle BEST describes the reason why the woman paid more than the man?

Question

Jett Velazquez

Business

4 February, 00:26

A woman buys a small house in a highly desirable neighborhood consisting of large homes and pays $390,000. A man buys a nearly identical house in a neighborhood of similarly sized homes and pays $290,000. What economic principle BEST describes the reason why the woman paid more than the man?

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Answers (1)

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Madilynn Wolf · Answer 1

Progression

Explanation:

The principle of the progression in the real estate states that the value of the property owned by a person will be increased if there are nice and highly desirable homes are present in the neighboring area.

Conversely, the value of the property owned by a person will be decreased if there are as normal and not nice and highly desirable homes present in the neighboring area.

Thus, Progression explains why the women paid more than the man as she purchased the home in highly desirable neighborhood.