Greeting Card Jackpot

 

Cameron gets a new job at a greeting card store and loves it because he is able to buy greeting cards with the employee discount. This greatly increases his greeting card purchases, and Mitchell points out that it is not saving them money, but costing them money. The discount represents a price reduction, which causes Cam to increase the quantity of cards he purchases.

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Diapers for a Year or Two

 

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.

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