1)Little Lisa's Recycling Plant is a monopolistic firm that provides pick-up of recyclable goods in the city of Springfield. Little Lisa's marginal cost is MC = 60 + 2Q, where Q is the number of tons recycled and P is the price per ton. The demand that it faces is given by P = 1,380 - 4Q, and its total cost at any level of output is TC = 67,000 + 60Q + Q².

Little Lisa's research division has developed a new recycling process that would allow the firm to change its cost structure. In particular, the technology would increase Little Lisa's fixed costs by $11,000 but reduce its marginal cost to MC = 30 + Q, making its total cost TC = 78,000 + 30Q + 0.5Q² at any level of output.

Should Little Lisa's adopt this technology? (Would this increase Little Lisa's profits?)

[Hint: Don't forget that this new technology would cause the firm to re-think its output decision!]