Property Valuation
The principle of increasing and decreasing returns states that adding more improvements to a property:
AAlways increases value proportionally
BIncreases value up to a point, after which additional improvements add less value than their cost✓ Correct
CNever increases value after the first improvement
DAlways decreases value due to increased maintenance costs
Explanation
The principle of increasing and decreasing returns holds that improvements add value up to a point of maximum value, after which additional improvements add less than their cost (over-improvement).
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