In the left graph, I read from a book (CFA L1 notes) that
At any output above the quantity where $MR = MC$, the firm will be generating losses on its marginal production and will maximize profits by reducing output to where $MR = MC$."
But now consider this:
$Q'$ is an output level above the one at which $MC=MR$. Shouldn't the yellow region represent a positive economic profit in this case? I can understand that at any output level above the one at which $ATC=MR$, the firm would start making losses. But isn't the quote above incorrect, or am I missing something? Sure, you might be making a suboptimal profit at output $= Q’$, but you’re certainly not making an outright loss.