See my post that it was originally replying to.Builders would be happy to construct more larger units if there was a market for them. They build what they can sell. The problem with the larger family sized units is that they aren't affordable for most families - a 700 new square foot condo in the city core at $550psf is $385k... a three bedroom 1,200 square foot unit would be $660,000 - most families would take a ground oriented unit in Markham, Milton etc for a fraction of that price. It's an affordability and choice issue and there currently isn't the demand for a lot of larger condo units. Should that demand materialize you can be assured that the development industry will be happy to sell lots of 3 bedroom units.
As for profits, the size of the unit has nothing to do with the profit margin. Any given building has a certain amount of revenue producing square footage on a floor that is generally sold at nearly the same $psf. So it doesn't really matter if that is split between 4 units per floor or 8 units per floor - the revenue will be the same... actually fewer units per floor would result in lower costs for the developer as there are fewer kitchens, bathrooms and expensive fixtures to install, less HVAC and hallway circulation space required (which in turn increases the amount of revenue producing square footage that can be sold to consumers) fewer costs related to sales, development charges, after-sales service costs and administrative costs etc.
The reason for smaller units isn't profit margins, that's where the market is and builders provide supply to fill demand.