Property Valuation
The principle of substitution states that:
AA buyer will pay more for a superior property
BA buyer will pay no more for a property than the cost of acquiring an equally desirable substitute✓ Correct
CMarket value increases with improvements
DSupply and demand determine value
Explanation
The principle of substitution is the foundation of all three appraisal approaches: a buyer will pay no more for a property than the cost of acquiring an equivalent substitute.
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