Question

Margot has fallen in love with a three-bedroom, 2,500-square-foot property in her friend’s neighborhood. It’s listed for $400,000. However, just down the street, another three-bedroom, 2,400-square-foot home very similar to the one Margot loves was just listed for $350,000. Margot and her agent immediately make an offer on the second property. Which economic principle is at work here?

Answer 1

Answer:

subsititution

Explanation:

Since in the situation it is mentioned that margot has fallen with 3 set bedroom i.e. 2500 square foot and its amount is $400,000. Now there is another three set bedroom of 2,400 square foot and its amount is $350,000 so here two options are given and according to the price he opted for the second property

So out of two choices he should opt for one that means it is a subsititution economic principle