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
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. This can also be seen as a form of mental accounting where Cam prioritizes the savings instead of seeing the cost of each card.
See more: demand, income effect, mental accounting, nonpecuniary benefits, prices, quantity demanded, rationality
Cam and Mitchell are on their way to Costco for some diapers, but Mitchell is surprised that they purchase items at Costco. He questions when this started happening and Cam jokingly acts like he means to act of purchasing diapers. Cam implies that the new baby has caused an increase in their demand for diapers. It turns out that Mitchell 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