The Venezuelan government places price ceilings on food items, in particular rice and milk. There were reports of shortages as well as wide spread smuggling and hoarding in the nation.

Answer the following questions:

1. The implementation of the price ceiling, in a competitive market that is in equilibrium, will lead to an increase or decrease in dead weight loss?Type I for Increase or D for Decrease.
2. The original market equilibrium price was $0.65 for onelitreof milk with 7 millionlitresbeing traded daily. The price ceiling has resulted in it being $0.40 for onelitreof milk with only 1 millionlitresbeing traded. The price consumers are willing to pay when the quantity of milk traded is 1 millionlitresis $0.95 for onelitreof milk. What is the value of the dead weight loss, assuming consumers are not able to pay $0.95 for onelitreof milk on the black market to obtain the milkie:the price ceiling is fully enforced and no black market exists? $. Answer in millions to two decimal places.
3. If the Venezuelan government removed the price ceiling and the original market equilibrium price of $0.65 for onelitreof milk was re-established for the 7 million liters being traded daily, would producer surplus then increase or decrease in the market?. Type I for Increase or D for Decrease.