A firm produces more of a commodity even when price is reducing only in a situation when it finds that the difference between $$TR$$ and $$TC$$ is increasing, so that its total profit $$(TR - TC)$$ is rising. It will stop production when profit is maximum or when the difference between $$TR$$ and $$TC$$ is maximum. Also, as stated in the Law of Demand, Demand rises when Price of a commodity falls. Thus, to meet Demand for the goods, the production will be increased. This will hence result in more profits for a firm.