Which of the following best describes the economic principle of obsolescence?

The economic principle of obsolescence refers to a decrease in the value of a property due to factors that are not inherent to the property's physical condition. When considering option B, it highlights that obsolescence can occur when there are market shifts—such as changes in demand or economic conditions—as well as functional issues that may render a property less desirable or suitable for modern uses. This may include outdated amenities, insufficient technology, or changes in consumer preferences.

For instance, a home may have once been highly desirable but could lose its appeal and value if more modern homes with contemporary designs become available. These shifts in the market or functional usability can result in a significant loss of value, illustrating the principle of obsolescence effectively. Thus, option B captures the essence of how broader economic and functional factors contribute to a property’s decline in value.