Which characteristic would generally support the highest value per square foot for a site?

Correct Answer

B) A small well-located parcel in high demand

Why this is correct: Value per unit (like square foot) typically exhibits an inverse relationship with size. Smaller, well-located parcels in high demand have the highest utility per unit and face the broadest buyer pool, commanding a premium rate. Why the other choices are wrong: 'A large parcel on the outskirts of the market' generally has a lower unit value due to lower demand and the principle of diminishing utility. 'An irregular parcel with limited road frontage' typically suffers from functional obsolescence, reducing its unit value. 'A parcel encumbered by a drainage easement' has a physical or legal constraint that diminishes its value. Exam tip: Remember the principle of diminishing marginal utility: each additional square foot of land typically adds less value than the previous one.