To a large degree, but for continued utility, mining has to occur, and should the price drop below a rational point, that impairs Bitcoin's long term success.
The difficulty adjusts based upon the rate and which each block is solved. If everyone stops mining the next block becomes significantly easier to solve.
Yes, but it's not in real time. You'd extend the time to get to that next, easier block, and with the drop in mining power, that could take a significant amount of time.
