Economics eductor. Follow me @Wootenomics
Cheyenne is showing her coworkers a bunch of baby pictures and videos, but Garrett is unhappy. He and Sandra both agree that there should be a social contract that you only have to look at one picture. The diminishing returns to looking at baby pictures kicks in very quickly when the kids aren’t your own. Cheyenne, on the other hand, doesn’t seem to have started exhibiting diminishing returns.
Garrett announces that there will be a 40% reduction in the price of exercise gear because the store is closing that section due to a lack of interest. If people aren’t buying the products on the shelves, Cloud 9’s opportunity cost may be high enough to encourage them to remove that section and replace it with a more profitable item. The price reduction should increase the quantity demanded for the exercise gear.
In an effort to achieve the perfect day with no mistakes, Amy assigns employees to store areas where they are most competent. After realizing the normal deli workers aren’t at the store today, Amy and Marcus start working in the deli. Amy asks Marcus to work the meat slicer, assuming that’s his comparative advantage. It turns out he’s not very good at that.
Store brand beef products are being marked down 80% and Garret suggests that customers should consider why a store would do something like that. He’s suggesting something may be wrong with the product, and perhaps the store knows more about the quality of the meat than the customers do.
Dina tries to impress her coworkers by giving them gifts, but she breaks into their lockers to give them their gifts. Some of the gifts are mildly offensive, but she thinks they are appropriate. The deadweight loss typically associated with gift giving is that people who give the gifts spend more money on the items than the recipient is likely to spend for the same item.
During the strike, additional Cloud 9 employees from the Kirkwood Branch show up, but they’re only there to replace the striking workers, not to join the strike. Jeff shares that he will welcome back any employees who come inside and apologize, and that is when the other employees realize they are easily replaceable. These employees do not possess any particular skills that other workers aren’t capable of doing. This labor market would be rather competitive since the workers are essentially homogenous.
Dina brings a pressure washer outside as a deterrent to the strike, but she ends of blasting a hole through Glenn’s car window. While the goal is to convince the other employees to quit, Glenn ends up bearing the full cost of her deterrent.
Mateo helps a customer find laundry detergent and goes through the process of naming some of the different options available. Product differentiation allows companies to offer similar, substitutable products based on customer preferences. Each focuses on a niche market or defining characteristic but are generally substitutes.
While interviewing candidates for the assistant manager position, Amy and Glenn try to learn more about the potential candidates’ ability to move into this new role. They are surprised by the applicants, namely that the pharmacist is interested in switching roles or by Marcus’s accidental admission of stolen property. The interviewing process can be costly because it takes time and effort to find a good “match” for the company. Interviewing candidates from the pool of current employees helps reduce the cost of finding a worker, but it still requires Glenn and Amy to take time away from the floor to interview people.
The employees almost start a debate on the merits of public healthcare in the US when Cheyenne almost goes into labor in the store. She would like to take time off for herself, but she feels she needs to keep working in order to save as much money as possible for when she has to take time off after the baby is born. In other countries, this decision isn’t usually necessary since maternity leave is provided by the government.
Teaching with Superstore