A local coffee shop found that the marginal cost of producing each additional cup of coffee is $3, while the marginal revenue from selling each cup is $5. If the shop wants to maximize its profit, what should it do in terms of production?

To maximize profit, the coffee shop should keep producing more cups of coffee as long as the revenue from each additional cup is higher than the cost of making it. In this case, it costs $3 to make one more cup, but the shop earns $5 from selling it. This means for each cup produced, the shop makes a profit of $2, which is the difference between the revenue and the cost. Therefore, the shop should continue to produce additional cups until the marginal cost equals the marginal revenue, ensuring they make the most profit. For example, if they can produce and sell 10 more cups, they would earn $50 in revenue while spending only $30 on costs, resulting in a total profit of $20.