Final answer:
When marginal costs increase, a firm's supply curve shifts to the left, indicating that it will supply fewer units at each price level due to the higher production costs.
Step-by-step explanation:
When a firm's marginal costs increase, the firm's individual supply curve will shift to the left. This shift indicates that the firm will supply fewer units of output at every price level due to the higher cost of producing additional units.
In essence, if the market price remains the same, the increased marginal costs mean that the profit margin on additional units would be lower.
As a consequence, the firm finds it less attractive to produce additional units beyond a certain point. So, the new supply curve represents a reduced willingness to supply at each price, signaling that the firm is now operating with higher costs.