Final answer:
The sales demand that old equipment and a new machine will satisfy should be considered an incremental benefit, as new technology can provide significant advantages at low marginal costs.
Step-by-step explanation:
In the context of replacing old equipment with a new machine, the question asks what should be considered regarding the sales demand that both the old equipment and the new machine will satisfy. The correct answer is B) An incremental benefit. This is because if the new machine meets the same demand as the old equipment, but offers additional benefits such as higher efficiency, lower operating costs, or increased output, these advantages are incremental benefits to the business. The sales demand that was previously met does not change; rather, there's potential for increased benefit to the firm due to better performance of the new machine.
Comparing this to diminishing returns in technological improvements, it is notable that over time we have not seen a pattern where technological advancements offer less benefit to output. Technological ideas often have wide application and low marginal cost, which can result in ongoing incremental benefits rather than diminishing ones. This is distinct from the incremental costs that a specific worker or group of workers might incur when using an additional machine or additional year of education, which do not apply in the case of the new equipment.