Suppose portable radios can be imported at a world price of $10 per radio. If trade were unencumbered, what would the new market equilibrium be? How many portable radios would be produced domestically? How many portable radios would be imported?

Domestic demand: Q = 5,000 - 100P; Supply: Q = 150P

At equilibrium, demand equals supply.

5,000 - 100P = 150P

250P = 5,000

P = 5,000/250

Equilibrium price (P) = $20

Substituting P in demand equation:

Q = 5,000 - (100*20)

Equilibrium quantity (Q) = 3,000 portable radio would be imported