system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: Real estate: Why would you build studios when you could build small one bedrooms and sell them for more?
gpt
There's people who either can't afford or don't want to spend the extra money on a 1BR.  This means that there's a *demand* for a product from people who would never be customers in the 1BR market.

You can also pack more studios into the same space.  You might be able pack 5x $1000 studios into the space of 4x one bedrooms which only rent for $1200 - that's $200 more for the studios.