Mitch and Cam have promised Lily that they can adopt a cat and name it Larry, but it turns out there is a lot more paperwork than they were hoping for. It turns out the cost of adopting the cat is beyond just paying for it at a shelter, but also involves forms and a site visit. Cam is quick to point out that there are a lot of cats that the shelter appears to be trying to have adopted, implying a surplus of available pets. A surplus occurs when the quantity supplied exceeds the quantity demanded at a particular price. That surplus wouldn’t exist if the adoption process was a bit easier (i.e. the price of adopting was lower).
See more: allocation, costs, demand, excess quantity, matching, prices, quantity demanded, surplus, transaction costs, wasted resources
Cam and Mitch are trying to get Lily into the best preschool they can, and preschool admissions are normally very competitive, but they think that being gay and having a minority child will give them a leg up in the admissions process. The market for daycare appears to be a monopolistically competitive environment in which firms differentiate their offerings to appeal to different parents.
See more: allocation, competition, demand, inefficiency, monopolistic competition, prices, product differentiation, rationing, signaling