You grow and sell wheat domestically. Assume the domestic market has a large number of buyers and sellers. This year wheat imports increased due to a great year in wheat production overseas, driving domestic prices down. The domestic wheat price fell below your average cost of production but is above your average variable cost. You've been up late running these numbers, and your niece asks why you're so stressed out. You answer that you aren't making your lease payments, and you've been considering whether you should shut down this year.

1. Will you shut down or not this year? Why or why not?
2. Suppose a significant number of your fellow farmers shut down this year in response to the price dip. How will that impact the elasticity of the aggregate supply curve?
3. After the elasticity of the aggregate S curve changes, how might the domestic equilibrium price of wheat change?
4. What determines whether you will stay in business in the long run?