posted by toya on .
Why might a profitable motel shut down in the long run if the land on which it is located becomes extremely valuable due to surrounding economic development? What kinds of costs are involved in making a decision to shut down?
Take a shot. What do you think.
Hint: think opportunity cost. What is the opportunity cost of holding the land and running a model on it?
The land might be worth more than running the business
The land might be worth more than running the business.