Chapter 21, Problem 55P

Assume two countries, Thailand (T) and Japan (J), have one good: cameras. The demand (d) and supply (s) for cameras In Thailand and Japan is described by the following functions: ${\text{Qs}}^{\text{T}}\text{=-5+}\frac{1}{4}\text{P}$

${\text{Qs}}^{\text{J}}\text{=-10+}\frac{1}{4}\text{P}$ ${\text{Qd}}^{\text{T}}\text{=60-P}$

${\text{Qd}}^{\text{J}}\text{=80-P}$

P is the price measured in a common currency used in both countries, such as the Thai Baht.

1. Compute the equilibrium price (P) and quantities in each country without trade.
2. Now assume that free trade occurs. The free-trade price goes to $\text{56}.\text{36}$ Baht. Who exports and Imports cameras and in what quantities?