Consider a perfectly competitive market that when left to its own devices maximizes society's gains to trade. An analysis of the effects of an excise tax levied on sellers shows that the tax increases the equilibrium price and decreases the total number of units sold. While the price rises, it does not increase by the full amount of the tax. For example, a $4 excise tax might lead to a $3 increase in price.

a. Explain verbally why the market price does not increase by the full amount of the tax.

b. Explain verbally how the tax transfers surplus from consumers to the government.

c. Explain verbally how the tax transfers surplus from producers to the government.

d. Explain verbally how the tax reduces the total surplus created by the market.