> And you'd build more floors until the marginal cost of adding the Nth floor is just under the marginal selling price of the floor. No, you'd stop much earlie

> And you'd build more floors until the marginal cost of adding the Nth floor is just under the marginal selling price of the floor. No, you'd stop much earlier or it wouldn't be worth it. > (so it always will be an issue) Sorry, I can't follow you there. What would be the issue? Even the marginal cost of building the Nth floor at which you'd stop would be much lower than current market prices for a similar amount of residential space. So building enough of it would drive prices down.