What would be characteristic of a market in transition from buyer's market to seller's market?
A. Prices would rise as supply decreases and demand increases
B. Prices would decrease as demand decreases and supply increases
C. Land development and new construction would decrease because of lower demand
D. Prices would not be affected, as they are primarily driven by interest rates
Answer: A. Prices would rise as supply decreases and demand increases
Explanation: A seller's market is one that benefits sellers, in that prices are higher. Under the theory of supply and demand, higher prices are created by increased demand and diminished supply.
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