Given the information, the firm will earn a negative economic profits in the short run but remain in business if the market price is $5.
What is a negative economic profits?
This is an recorded profit that occurs when the cost of equity capital exceeds the accounting profit in a firm.
Hence, as its records a negative economic profit. the firms have the cause to leave the market because since its resources would be more profitable elsewhere.
Therefore, the Option A is correct.
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