1.Assume that Crystal Sugar is a perfectly competitive firm operating in a perfectly competitive market and initially at the long-run equilibrium point of operations. Recent flood has damaged a vast harvest of sugar cane and increasing the wages of workers, leading to the firm shutting down in the short run and not producing in the long run. Explain your answer using the diagram.

Firm In P.C Industry in P.C. E E MC S AC PI PI DEAR MR 01