A monopolist faces a downward-sloping demand curve. If the marginal cost of production increases, what is the likely outcome for the monopolist's profit-maximizing output level?

A monopolist is a single seller in the market, and they face a downward-sloping demand curve, meaning that as they lower their price, they can sell more of their product. When the marginal cost of production increases, it means that it costs the monopolist more to produce each additional unit of their product. To maximize profit, the monopolist will adjust their output level; typically, they will produce less because the higher costs make it less profitable to produce the same amount as before. For example, if a monopolist was producing 100 units of a toy at a cost of $10 each, and then the cost rises to $15, they might decide to reduce production to 80 units to maintain profitability. This reduction in output helps them avoid losses that would occur if they continued producing the same amount despite higher costs.