To answer this question, let's go through the code and understand what happens when the package is compiled.
The given code defines a package body named "COMPILE_THIS" with three procedures: A, B, and C. Procedure C is a local construct to the package.
When the package is compiled, the code will produce a compilation error because procedure C requires a forward declaration.
In the code, procedure B calls procedure C, and procedure C calls procedure B. Since procedure C is defined after procedure B, a forward declaration is required for procedure C to be able to call procedure B. However, no forward declaration is provided in the code, which leads to a compilation error.
Therefore, the correct answer is C. It produces a compilation error because procedure C requires a forward declaration.