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?

The opportunity costs may be too high, and the motel may not yield high enough returns to offset them.

Opportunity costs is the money you do not earn for choosing one alternative investment or action over another. In this case, the cost of the land is probably very high and the motel (or any other business) might not be making as much money from their regular operations as they could from selling the land and using that money for another investment.

A business will shut down when their economic costs exceed their revenue.