Suppose total factor productivity increases. Which of the following is incorrect?

When price is greater than both marginal cost and average variable cost, the perfectly competitive firm

A) is maximizing economic profit. B) should increase its level of output. C) should reduce its level of output. D) should stop production.

If the minimum points of all the possible short-run average total cost curves become successively lower as quantity of output increases, then:

a. the firm should try to produce less output. b. total fixed costs are constant along the LRAC curve. c. there are economies of scale. d. the firm is probably having significant management problems. e. when output is doubled, total costs are doubled.