Elaine is house sitting for Jerry. Jerry explains the many flaws of his apartment. George, a realtor, finds a new, bigger apartment for Jerry. Elaine tries to get him to move so she can move into Jerry's old place. "It's a dump," she says, "but it's a step up for me."
Stringer discusses with Mr. Lucas a company's options when it is operating in a competitive market and has an inferior product. Mr. Lucas suggests acquiring competitors or dropping the price to gain market share. He warns Stringer that the latter tactic will lead to lower product credibility and mentions the example of Worldcom.