A local utility company operates as a monopoly in your town. The company's marginal cost of providing electricity is constant, while its marginal revenue decreases as it increases output. If the company sets its output level where marginal revenue equals marginal cost, which of the following outcomes is most likely to occur in terms of social welfare?

When a monopoly sets its output level where marginal revenue equals marginal cost, it typically produces less electricity than would be supplied in a competitive market. This means that fewer customers can access electricity, which can lead to higher prices and reduced consumer welfare. For example, if the utility company decides to produce 100 units of electricity instead of 150, some households may not receive the electricity they need or may have to pay more for it. As a result, the overall social welfare in the town decreases because not everyone can benefit from the electricity at a fair price. In summary, the monopoly's output decision can lead to inefficiencies and a loss of benefits for the community.