An owner whose property is in a strong market position, where fewer services can be offered to tenants for the same dollar of rental income and where the owner will not lose tenants if the property is under-maintained, is said to participate in a market that has:

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BlackTom AI · Accepted Answer

The question describes a situation in which an owner is in a strong market position: tenants are less likely to leave even if fewer services are provided for the same rent, and the property can command rental income with relatively little change in demand. This implies that the demand for the space is not highly responsive to changes in price or service levels.
Option 1: 'a relatively elastic demand for space.' If demand were elastic, tenants would react strongly to price changes or reductions in service, potentially leaving or seeking alternatives when conditions change. The scenario described suggests the opposite, so this is not correct.
Option 2: 'a relatively inelastic demand for space.' This matches the description: in a strong market, tenants continue to occupy space even with fewer services or pricing variations because demand is not easily sensitive to these changes. This is consistent with an inelastic demand.
Option 3: 'economies of scale.' Economies of scale refer to cost advantages gained by increasing production or service scope, not to how tenants respond to pricing or service levels in a landlord-tenant market context. The scenario focuses on demand sensitivity, not cost structure from scale.
Option 4: 'diseconomies of scale.' Diseconomies of scale describe rising per-unit costs as output expands, which is also unrelated to the described market power and tenant behavior in this case.

R E 250 A Final Exam

An owner whose property is in a strong market position, where fewer services can be offered to tenants for the same dollar of rental income and where the owner will not lose tenants if the property is under-maintained, is said to participate in a market that has:

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