In a monopoly, if the marginal cost of production is less than the marginal revenue, the monopolist will maximize profit by increasing output until marginal cost equals marginal revenue.

In a monopoly, the goal of the monopolist is to make the most profit possible. When the marginal cost, which is the cost of producing one more unit, is less than the marginal revenue, which is the money earned from selling that extra unit, the monopolist can increase profits by producing more. This is because each additional unit sold adds more to revenue than it costs to produce. The monopolist will keep increasing production until the marginal cost equals the marginal revenue, as this is the point where profit is maximized. For example, if it costs $5 to make one more toy but selling it brings in $10, the monopolist will keep making toys until the cost of production rises to $10, at which point they will stop to ensure they are making the highest profit.