Mitch and Cam have promised Lily that they can adopt a cat and name it Larry. Unfortunately, when they go try to adopt a cat they realize that there are a lot of non-monetary costs involved in the cat adoption process. Cam points out that they would not have a surplus of cats if they made the process easier (or essentially lowered the price).
See more: allocation, costs, demand, excess quantity, prices, quantity demanded, surplus, transaction costs, wasted resources
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.
See more: demand, income effect, nonpecuniary benefits, prices, quantity demanded
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!
See more: demand, elasticity, necessities, preferences, quantity demanded
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.
See more: complements, demand, elasticity, income effect, prices, quantity demanded