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In which situation can increasing density affect land value?

Answer and explanation

Correct answer: When demand for housing and trade rises on limited land

The direct answer is A: demand for housing and trade rises on limited land. Land value is influenced by demand and supply. If many people live in an area, they may need more homes, shops, offices and other activities. When the available land is limited, increased demand can make land more valuable, especially where jobs, transport and services are attractive. Option A is correct because it gives both necessary conditions: limited supply of land and rising demand for housing and trade. Option B is wrong because if everyone leaves, demand generally falls rather than rises. Option C is wrong because zero land demand would not push the value upward through demand. Option D is wrong because no economic activity usually means fewer buyers and less pressure on land. The relationship is not automatic in every place; planning, location, infrastructure and economic conditions also matter. The question asks when an effect can occur, and A states a sensible condition. Exam cue: scarce land plus high demand can raise land value.

Related tags

Land ValueHigh DensityHousing Demand

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