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microeconomics

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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?

  • microeconomics -

    The owner might sell the land for a huge profit -- and then build another motel in another location.

  • microeconomics -

    1. 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?

    1a. What kinds of costs are involved in making a decision to shut down?

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