Mitch is told by the local bait shop owner that worms are twice the price by the lake as they are in town. This is probably because people who are already at the lake aren’t willing to drive back to save a few cents, so the dock can markup the price. This implies that people at the lake are insensitive to the price, or inelastic.
Mitchell doesn’t understand why they buy their diapers at Costco, but Cam jokes that they’ve been doing it since they had a baby. The implication is that the baby has caused an increase in their demand for diapers. It turns out that Mitchel really likes Costco!
When Mitchell realizes how cheap items at CostCo are, he suggests getting enough for the next two years. When he realizes how many diapers that is, he thinks about getting a shed to store them all. When people face steep discounts on prices, they respond by buying more (law of demand), but how much more they decide to buy is based on the elasticity of demand. In this case, Mitchel appears to be a very price sensitive buyer even though the items are really necessities.