Suppose the firm produces less than Q*, such as Q^U (under produce) in the graph to the right. In this case, all the units numbering greater than Q^U and less than Q* can be produced at lower added costs than the additional revenue they would generate. For these units MR > MC.

    If the firm chooses to produce Q^U rather than Q* units it is giving up profits equal to the shaded area shown to the right. So, anything less than Q* isn't profit maximizing.

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