Firm X and firm Y are the only two Internet providers in a small town. The demand for Internet subscriptions is P = 60 - Q. Neither firm X nor firm Y has any fixed costs. The marginal cost of firm X is constant at $10, and the marginal cost of firm Y is constant at $20. Each firm can sell either 10 or 20 subscriptions, and they meet only once in this market.
Definitions:
Return on Equity
A financial performance measure that demonstrates how effectively a company uses investor funds to generate profit.
Equity Multiplier
The equity multiplier is a financial ratio that measures the degree of a company's financing through debt compared to its owned equity, indicating leverage level.
Return on Assets
A financial ratio indicating the profitability of a company relative to its total assets.
Costs of Goods Sold
Costs directly related to the manufacture of products sold by a company.
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