Suppose the world price of pencils is $0.25 each and a country's firm that produces pencils has an average cost of $0.35 each. What will the firm do?
A) It will continue to produce pencils.
B) In the long run, it will shut down.
C) It may temporarily shut down in the short run, but will continue to operate in the long run.
D) It will shift operations to another country.
Correct Answer:
Verified
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