What is the basis for the principle of substitution? (a) an informed buyer will pay no more for a property than the cost of acquiring another equally desirable property with the same or equal utility.(b) properties will typically hold their value when properties in a neighborhood tend to be similar and conform to common standards.(c) although a property may have multiple potential uses, one will be the highest and best use. d) smaller properties in a neighborhood of large properties will tend to increase in value, while larger properties in an area of smaller properties will tend to decrease in value over time.

The correct answer is a) An informed buyer will pay no more for a property than the cost of acquiring another equally desirable property with the same or equal utility.

Explanation:

The principle of substitution is a principle in economy that explains a customer or buyer would choose a substitute (product or good with similar or same qualities) to another product if the price of the product increases or there are other products or goods available with a lower price and as long as the customer's economic conditions have not changed.

This means the customer chooses the cheapest option between products available in the market or substitutes a product with others if the new product (substitutes) can be used in the same way than other product. This implies the basis for substitution is that a customer does not pay more for a product if he can get the same or similar product at a lower cost or that "an informed buyer will pay no more for a property than the cost of acquiring another equally desirable property with the same or equal utility".

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