In a monopolistic market, how does the profit-maximizing output level compare to the socially optimal output level?

In a monopolistic market, the profit-maximizing output level is usually lower than the socially optimal output level. This happens because a monopoly controls the supply of a product and sets prices higher than what would be found in a competitive market. The socially optimal output level is where the price equals the marginal cost, meaning resources are used efficiently and everyone benefits. For example, if a monopoly sells a popular type of medication, it might limit production to keep prices high, even though producing more could help more people. This difference can lead to a loss of overall welfare in society, as fewer consumers have access to the product.