Price MC P1 P2 Lost profit from producing too little(Q1)and selling at D=AR too high a price(P1) Lost profit from producing too much(Q2)and selling at too low a price(P2) MR Q1 Q+ Q2 Quantity Profit is Maximized When Marginal Revenue Equals Marginal CostProfit is Maximized When Marginal Revenue Equals Marginal Cost