The Department of Justice and the Federal Trade Commission must define the relevant market when determining whether to allow a merger. How do economists identify the relevant market? The relevant market has been identified if A. a technological advance results in lower prices; otherwise, the market is too broadbroad. B. a price increase results in higher profits; otherwise, the market is too narrow. C. an increase in output results in a decrease in average costs; otherwise, the market is too narrownarrow. D. an increase in profits results in new firms entering; otherwise, the market is too broadbroad. E. a price increase results in lower sales; otherwise, the market is too narrownarrow.

On january 2, 2016, twilight hospital purchased a $94,800 special radiology scanner from bella inc. the scanner had a useful life of 4 years and was estimated to have no disposal value at the end of its useful life. the straight-line method of depreciation is used on this scanner. annual operating costs with this scanner are $106,000. approximately one year later, the hospital is approached by dyno technology salesperson, jacob cullen, who indicated that purchasing the scanner in 2016 from bella inc. was a mistake. he points out that dyno has a scanner that will save twilight hospital $26,000 a year in operating expenses over its 3-year useful life. jacob notes that the new scanner will cost $111,000 and has the same capabilities as the scanner purchased last year. the hospital agrees that both scanners are of equal quality. the new scanner will have no disposal value. jacob agrees to buy the old scanner from twilight hospital for $40,500. if twilight hospital sells its old scanner on january 2, 2017, compute the gain or loss on the sale. prepare an incremental analysis of twilight hospital.