A firm is currently selling its product in a competitive market for $30 per unit. The firm's average total cost is $35 per unit, and its average variable cost is $25 per unit. The firm's management is pessimistic about the market and does not expect the price to rise in the foreseeable future. Which of the following actions is the most economically sound for the firm in the short run, and what is the correct justification?
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A firm is currently selling its product in a competitive market for $30 per unit. The firm's average total cost is $35 per unit, and its average variable cost is $25 per unit. The firm's management is pessimistic about the market and does not expect the price to rise in the foreseeable future. Which of the following actions is the most economically sound for the firm in the short run, and what is the correct justification?
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