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Avoiding the problem (as per Lauren Ipsum's answer) is probably the best way to deal with this. But let's assume you don't want to change anything about your paragraphs. The answer is unambiguous: ...
Answer
#4: Attribution notice removed
Source: https://writers.stackexchange.com/a/7257 License name: CC BY-SA 3.0 License URL: https://creativecommons.org/licenses/by-sa/3.0/
#3: Attribution notice added
Source: https://writers.stackexchange.com/a/7257 License name: CC BY-SA 3.0 License URL: https://creativecommons.org/licenses/by-sa/3.0/
#2: Initial revision
Avoiding the problem (as per Lauren Ipsum's answer) is probably the best way to deal with this. But let's assume you don't want to change anything about your paragraphs. The answer is unambiguous: no close quotation mark. For two reasons. First reason is simple correctness: you don't want [Fowler](http://en.wikipedia.org/wiki/A_Dictionary_of_Modern_English_Usage) to turn in his grave. The more important reason is clarity. If I - as an unsuspecting reader - came across the passage as originally quoted, I would be forced to re-read it, because I'm being given contradicting cues. The closing quote mark on the previous paragraph tells me there's two different people speaking, and the 'she continued' tells me that it's just one. There are times when you want your reader to be pulled up short and have to think about what they're reading; but this isn't one of them.