Suppose that production of wheat is a perfectly competitive market / industry. Given the following information currently for the wheat market:
Price = $5.50 per bushel
ATC = $6.00 per bushel
AVC = $5.00 per bushel
Where ATC is average total cost and AVC average variable cost.
Should these firms shut-down and sell their farms? What will happen in the long-run to these producers and thus the market / industry in terms of their profits / losses? Explain your answer by reference to specific market rules and to the adjustment process