The Reason Why Hotels in Cairns Operated at a Loss

The reason why hotels in Cairns operated at a loss rather than shut down when tourism declined sharply is:

A) the government offered to subsidise the firms until they were profitable again
B) the hotels had sunk costs that could not be recovered if they had closed
C) the banks that financed the hotels wrote off the debt rather than insist it got paid back
D) tourists donated money to the hotels to keep them in operation