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Two firms face the demand equation given by P=200,000 -6(Q1 + Q2) where Q1 and Q2 are the outputs of two firms. The total cost equations for two firms are given by: TC1 = 8000Q1 and TC2 = 8000Q2.
If each firm sets its own output rate for profit maximization, and the other firm holds constant, what is the optimal output of each firm, as well as the optimal price for each firm.
Please show the work and/or formulas to derive the solution.
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