10.25. The domestic demand curve for portable radios is given by Qd " 5000 ! 100P, where Qd is the number of radios that would be purchased when the price is P. The domestic supply curve for radios is given by Qs " 150P, where Qs is the quantity of radios that would be produced domestically if the price were P.

Suppose radios can be obtained in the world market at a price of $10 per radio. Domestic radio producers have successfully lobbied Congress to impose a tariff of $5 per radio.

a) Draw a graph illustrating the free trade equilibrium (with no tariff ). Clearly illustrate the equilibrium price.

b) By how much would the tariff increase producer surplus for domestic radio suppliers?