<p>Consumer surplus is their willingness to pay minus the price they pay,  and producer surplus is the price they receive minus their willingness to receive. So if you are assuming that consumers are forced to buy at a price of 100, yes the consumer surplus is negative. and according to your example, the producer surplus will be zero. You are right it does not make sense whatsoever to reflect it as producer surplus.</p>

CC BY-SA 4.0
2019-04-17T20:50:32.153Z
2019-04-17T20:50:32.153Z
Regio
<p>Assume there is a good that a producer sells for <span class="math-container">$100$</span>. A consumer's willingness to pay for that good is <span class="math-container">$50$</span>. However a government program forces consumers to purchase the good irrespective of their willingness to pay (assume budget constraints are not an issue right now). Would this imply their consumer surplus would be <span class="math-container">$-50$</span>?</p>

<p>Or do we reflect the negative consumer surplus as producer surplus (this doesn't make sense to me)?</p>

CC BY-SA 4.0
2019-04-17T17:58:47.163Z
"Or do we reflect the negative consumer surplus as producer surplus (this doesn't make sense to me)" Then why are you throwing it out there?
Giskard
CC BY-SA 4.0
2019-04-17T19:18:17.057Z
I would think so. Because the consumer doesn't want to buy it, forcing him to buy it should be reflected as negative consumer surplus. But it's hard to imagine such a situation.
Vizag
CC BY-SA 4.0
2019-04-18T09:55:29.950Z
"a producer sells for 100".  Does that mean their supply curve is perfectly elastic at 100?  Or that their supply curve (which may be upward-sloping) happens to intersect the demand curve at 100?  In the latter case if consumers are forced to purchase the good the resulting shift in the demand curve will change the price.
Adam Bailey
CC BY-SA 4.0
2019-04-18T19:31:27.107Z
@adam Perfectly elastic
Joseph
<welfare-economics><social-welfare><consumer-surplus>
Can consumer surplus be negative if a consumer is forced to make a purchase?
Joseph
# Can consumer surplus be negative if a consumer is forced to make a purchase?

(Asked by: username_0 on 2019-04-17)

Assume there is a good that a producer sells for $100$. A consumer's willingness to pay for that good is $50$. However a government program forces consumers to purchase the good irrespective of their willingness to pay (assume budget constraints are not an issue right now). Would this imply their consumer surplus would be $-50$?

Or do we reflect the negative consumer surplus as producer surplus (this doesn't make sense to me)?

**Tags:** welfare-economics, social-welfare, consumer-surplus

> **Comments:**
> **username_1**: "Or do we reflect the negative consumer surplus as producer surplus (this doesn't make sense to me)" Then why are you throwing it out there?  
> **username_2**: I would think so. Because the consumer doesn't want to buy it, forcing him to buy it should be reflected as negative consumer surplus. But it's hard to imagine such a situation.  
> **username_3**: "a producer sells for 100".  Does that mean their supply curve is perfectly elastic at 100?  Or that their supply curve (which may be upward-sloping) happens to intersect the demand curve at 100?  In the latter case if consumers are forced to purchase the good the resulting shift in the demand curve will change the price.  
> **username_0**: @username_3 Perfectly elastic  

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## 1 answers

### Answer by username_4 on 2019-04-17. Score: 3 | Accepted answer

Consumer surplus is their willingness to pay minus the price they pay, and producer surplus is the price they receive minus their willingness to receive. So if you are assuming that consumers are forced to buy at a price of 100, yes the consumer surplus is negative. and according to your example, the producer surplus will be zero. You are right it does not make sense whatsoever to reflect it as producer surplus.


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