Explain Why Might A Profitable Motel Shut Down In The Long Run

352 Words1 Page

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?
A profitable motel might shut down in the long run because its land value has risen. If the opportunity cost of stay in business doesn’t outweigh the possible capital gain, then the owner or owners has to make a logical decision to shut down. In my opinion, it would be more profitable to shut down because then it would be possible to sell the property and earn a capital gain; instead of paying the increase taxes due to the surrounding economic development which increased the land value. Another reason for a motel to shutdown would be new development appeal, which buyers comes in to the

More about Explain Why Might A Profitable Motel Shut Down In The Long Run

Open Document