Is the Marshall diagram general equilibrium in the wrong place? Profit maximisation of consumers?

Perhaps someone can help me by pointing out where the following line of enquiry goes wrong….

The following analysis will consider the possibility that the equilibrium point of the neo-classical model of perfect competition ought to be in a different place. 

We start with the standard Cournot/Marshall type supply and demand diagram. We note that the supply curve represents the line of maximum profitability for the producer, which implies that immediately either side of that line, there are other quantities which the producer could also supply (at the market price) but which would not be quite as profitable.

In a marginalist frame of thinking, the unit of supply beyond the last profitable unit does not get produced because that specific unit makes a loss, so perhaps the less-than-maximally-profitable area to the right of the supply curve can be disregarded. But the units of supply before the last profitable unit do get produced, so they can be brought into consideration.

For my example Diagram 1 below, I postulated a product whose production process includes some fixed costs (factory/machinery?) and some production costs which vary with the quantity of production (input material costs?), but which show diminishing returns (marginal production cost increasing).  The presence of the fixed costs causes the supply curve to terminate at a specific point on its left hand end, at the market price level below which no possible quantity of production yields a profit. 

On the Diagram 1 below, the red line represents the supply curve.  The green and blue lines represent price/quantity combinations where the supplier breaks even, in its overall supply; in the case of the green line, these price/quantity combinations are the first units of supply which have made enough revenue to recover the fixed costs. The actual values shown are arbitrary, but I believe the shape of the lines is correct for the example described above.

Diagram 1

Turning to the demand side, we note that the demand curve represents the minimum profitability for the consumer; the market/quantity combinations where the derived utility is equal to the price paid, at whatever arbitrary conversion of utility to money we have assumed. Any point on the demand curve is where the consumer breaks even: it doesn't just represent their willingness to pay; rather it represents their maximum willingness to pay, where the utility of the purchased product is equal to the latent utility of the money they might spend.  

Any point above the demand curve represents a loss to the consumer: the utility achieved from the purchase is less than that of the money paid, and the consumer would have been better off keeping their money.  Any point below the demand curve represents a profit to the consumer (their overall utility position of products plus money has improved), and points further away downwards from the demand curve represent larger profits.  The line of maximum profitability for the consumer would appear to be a horizontal line at a price of zero.

We know that the perfect competition model assumes rational market actors and perfect information available to all parties.   Yet we are invited to accept that the market price and quantity will find its equilibrium at a point which represents maximum profit for the producer, but zero profit for the consumer, marked as E on Diagram 2 below.

Any point inside the green shaded area represents a trade which is profitable to both the consumer and the producer. Point S0 represents the best outcome for the consumer, where they maximise their profit, and the producer profit goes to zero (but not negative).  Point E represents the best outcome for the producer, where they maximise their profit at that price, but also maximise their overall profit.  Point A represents a minimum for both parties: they both merely break even. Green line A-B-S0 represents break even for the producer.  Purple line A-E represents break even for the consumer.

Diagram 2

It seems inconsistent to me, to postulate that the producers will only trade at points which maximise producer profitability, yet the consumers are envisaged to happily trade at points which minimise their consumer profitability.  Why would a rational, perfectly informed consumer tolerate this?

Let us consider whether there is another point on the diagram (labelled C) where the sum total of consumer profitability and producer profitability is maximised.  That point will (I believe) be somewhere on the line between S0 and E.  I suspect the exact location is dependent on the relative gradients of the supply and demand curves: someone with less rusty calculus than me might be able to generalise where it will be.

I have considered the possibility that the total consumer+producer profit at C is less than at one of E or S0: that it would be some kind of weighted average of them, rather than an actual maximum.  In my example, this is not the case; there is a maximum consumer+producer profit at C, which is higher than at either E or S0, and I suspect that is generally true.  

Let us imagine a market, where the current market price is at the price equivalent to C (which would normally be seen as an instance of excess demand).  The producer would be happy to sell more at a higher price and push the market towards E which increases the producer total profit.   The standard treatment of excess demand suggests that buyers who are willing to pay more than the price at C, will bid up the price until it reaches E. However, in my analysis. consumers actually have no incentive to do that. Any move towards E reduces the profitability of the consumer, and thus any rational consumer would decline to participate. 

What happens to the excess demand?  We can note that the demand is really for utility rather than necessarily for specific amounts of specific products.  Because the consumer is paying less at point C, they are saving a portion of their money relative to what would happen at point E.  The latent utility of that saved money, makes up for the un-achieved utility of the production units making up the excess demand.

In conclusion, I am suggesting that the market equilibrium will be found at point C rather than at point E.

In suggesting such a heterodox solution, I recognise that it is most likely that I have made an error in my analysis somewhere.  If I have, my personal utility would be increased if someone could point out exactly where that error lies, or else point me to some writers who have examined the same ideas.