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Regarding the motel going out of business in the long run, implicit cost would be one of the main factors to consider. As time goes
Regarding the motel going out of business in the long run, implicit cost would be one of the main factors to consider. As time goes on and more development happens on the land, the motel will eventually start losing revenue due to the fact of growing firms around the motel. Because of the completion, the price fluctuation might drive rent cost higher thus bottle necking the price distribution when considering other means to maintain the motel's integrity. The implicit cost would show that even the profitable hotel is continuing to make profit, it might not be making as much as it could based on the competing business around. For example, if there was a major chain hotel like Hilton or Hampton Inn built next to the motel, if the motel sticks to the same methods that made it currently profitable, it will eventually fail because the demand required to keep up with cost and accommodations of the other major hotel chains would show to be too much. Over time, the land cost such as taxes could eventually lead to the motel shutting down. Another example I think of is actually playing the game of Monopoly. If you buy the brown
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