Profit-Maximizing Output for a Price-Taker
A small, independent coffee roaster operates in a competitive market and sells its specialty coffee beans at the market price of $15 per pound. The table below shows the roaster's marginal cost for producing different quantities of coffee beans.
| Quantity (lbs) | Marginal Cost ($) |
|---|---|
| 1 | 10 |
| 2 | 11 |
| 3 | 13 |
| 4 | 15 |
| 5 | 18 |
| 6 | 22 |
Based on this data, what is the profit-maximizing quantity of coffee for the roaster to produce? Explain your reasoning by analyzing the relationship between the market price and the marginal cost at each level of output.
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