Question

jacob is a developer who purchased 78 acres and had it subdivided into half-acre lots. he decided to install sewer and underground electric for the entire subdivision, because he thinks that he will easily recoup his initial infrastructure investment. this is an example of which economic characteristic of real property? unset starred question area preference immobility permanence of investment scarcity

Answer 1

The economic characteristic of real property highlighted in this scenario is scarcity, where one producer can serve the entire market more efficiently due to economies of scale.

Step-by-step explanation:

This is an example of the economic characteristic of real property known as scarcity. Jacob purchased 78 acres and subdivided it into half-acre lots. By installing sewer and underground electric for the entire subdivision, Jacob is making a substantial infrastructure investment. He believes that this investment will help him easily recoup his initial investment because the cost of providing additional services, such as sewer and electric, to each individual lot is significantly lower compared to duplicating the infrastructure for multiple smaller producers. This situation highlights the concept of a natural monopoly where one producer can serve the entire market more efficiently due to substantial economies of scale.