Need to configure liquidsoap for transcoding - ubuntu-16.04

Question

I'm trying to transcode stream with liquid and output to icecast2
Below is my config taken from official website http://savonet.sourceforge.net/doc-svn/cookbook.html
# Input the stream,
# from an Icecast server or any other source
url = "http://www.protonradio.com:8000/schedule.m3u"
input = mksafe(input.http(url))
# First transcoder: MP3 32 kbps
# We also degrade the samplerate, and encode in mono
# Accordingly, a mono conversion is performed on the input stream
output.icecast(
%mp3(bitrate=32, samplerate=22050, stereo=false),
mount="/your-stream-32.mp3",
host="streaming.example.com", port=8000, password="xxx",
mean(input))
When I try to run it with ./radio.liq
I get this error:
root#Ubuntu:/etc/liquidsoap# ./radio.liq
./radio.liq: line 4: url: command not found
./radio.liq: line 5: syntax error near unexpected token `('
./radio.liq: line 5: `input = mksafe(input.http(url))'
root#Ubuntu:/etc/liquidsoap#
Here's what happens when I run with this command:
root#Ubuntu:/etc/liquidsoap# liquidsoap radio2.liq
init: security exit, root euid (user).
root#Ubuntu:/etc/liquidsoap#
Buffer errors with this stream url http://46.21.106.168:80
2016/09/30 15:57:17 [http_4756:3] Buffer overrun: Dropping 0.03s.
2016/09/30 15:57:20 [http_4756:3] Buffer overrun: Dropping 0.00s.
2016/09/30 15:57:26 [http_4756:3] Buffer overrun: Dropping 0.00s.
2016/09/30 15:57:37 [http_4756:3] Buffer overrun: Dropping 0.01s.
2016/09/30 15:57:44 [http_4756:3] Buffer overrun: Dropping 0.00s.
2016/09/30 15:58:11 [http_4756:3] Buffer overrun: Dropping 0.00s.
2016/09/30 15:58:47 [http_4756:3] Buffer overrun: Dropping 0.00s.

Answer 1

You should start liquidsoap interpreter and feed your script to it like this:
liquidsoap radio.liq
In your example you start the script from the command line directly and it goes to shell (bash), not liquidsoap.

Answer 2

To add on to the comments of Alexeys answer.
Your script did not run because you did not tell the script what application to run it with. On windows the file extension (.exe or .txt or .doc) is used to distinguish which application to open. On Unix the first line known as the "sha bang" tells the OS which application must run this file.
So if you first check where your liquidsoap is installed with:
which liquidsoap
Then add the response path to your scripts first line like so:
#!/usr/bin/liquidsoap
Unix will now know which application to open it with.
On your second observation(not issue), the Overrun is seen because you are fetching a stream from a Icecast server using http. The Icecast sever is generally configured to "burst" some data to you on connection (normally for players to fill their buffers). Anyhow, the buffer used in the input.http command is too small for this sudden burst of data and therefore liquidsoap throws a overflow exception. To fix this, increase the max buffer.
input = mksafe(input.http(url,buffer=2.,max=120.))