The New York Post recently profiled the 175-square foot “micro-studio” apartment of the Prokop family, located in the Morningside Heights neighborhood of New York City. It has the distinction of being the smallest apartment in New York, at a size that’s smaller than many people’s guest bedrooms.

At 14.9 feet long and 10 feet wide, it’s about as narrow as a subway car and as claustrophobic as a jail cell. […]

It has two small windows with views of upper Manhattan; hardwood floors; a tiny kitchen with a mini-fridge and hotplate; and a closet-sized bathroom with a shower, sink and toilet.

They couple only paid $150,000 for the apartment, which may seem a steal in comparison to the high-priced city condos in neighboring buildings. But a closer look reveals that -though the Prokop family seems thrilled with their new purchase – they didn’t get quite as good a deal as it seems.

If you take the condo’s price of $150,000, and divide it by the square footage, you find that Mr. and Mrs. Prokop paid about $858 per square foot.

Compare that to this 750 square foot apartment with 1 bedroom and 1 bathroom. It’s located on the same block, has more amenities, and four times the space. And yet, with an asking price of $560,000, it’s selling for over $100 less per square foot than the Prokop’s micro-studio.

Higher cost for the convenience of a smaller quantity is nothing new. Restaurants charge $10 a glass for wine that costs $40 a bottle (which usually contains 5 glasses). Grocery stores charge $1.50 for 20 ounces of purified water or soda near the cash register, and $.99 if you buy a gallon or 2 liter of the stuff.

There are different reasons for each of these price differentials. And although there may be a higher price associated with smaller size, sometimes the trade-off is worthwhile. For instance, some restaurant patrons may only want a single glass of wine. In this case, the Prokop family felt the small space fit their lifestyle, and $150,000 was in their price range.

The point is this – just because the sticker price seems low, it doesn’t necessarily mean you’re getting a good deal.  Before you pull the trigger on any purchase, make sure you know all your options, and whether there’s a better bargain out there.

The clothing company H&M has made a name for itself providing high-fashion clothing at prices that most people can afford. (BTW – I am not paid by H&M; this is what my wife has told me.)

On occasion, H&M enlists the services of an otherwise exclusive designer, to produce a line specifically for the store. The latest such luminary is Jimmy Choo, the shoe & handbag designer of Sex-and-the-City notoriety. The line will be released in H&M stores in November.

The most basic black pump in Choo’s high-end line retails for around $500, with newer and flashier items fetching well over $1,000. At H&M, the entry-level price point will be $99, with the most expensive shoe topping out at $299. It’s not exactly Payless, but considering the demand for the designer, these are bargain prices.

Indeed, H&M is anticipating such high demand for this product that they’ve created a section on their website: “How to Shop.” The first 160 people in line at H&M stores will receive bracelets limiting their time to shop the Choo collection.

Furthermore, of the 150+ H&M locations in the US, only 10 will carry the line. Five of those are in New York City.

What gives? Why doesn’t H&M want everyone to experience the newly-affordable luxury that Jimmy Choo has created?

Not exactly. By limiting the supply and the amount that can be purchased, H&M is accomplishing two things: it’s ensuring that the price won’t fall, and it’s ensuring that Jimmy Choo maintains its mystique.

Consider this – what if every H&M store in the United States carried unlimited amounts of this line? Sure, they might be busy on the first day, but after a time the consumer demand would be satisfied. Inventories would build, and H&M would have to put the shoes on sale. So, not only would Jimmy Choo shoes be on the feet of every girl in the US, but they’d be selling at a discount price. The horror!

Instead of such a nightmare scenario, H&M and Jimmy Choo have played it smart. They’ve made a limited quantity, so the demand for these shoes will be far from satisfied, and there won’t be any pressure to discount the price. Additionally, since only a relatively lucky few will be able to purchase these shoes, Jimmy Choo can retain the exclusive aura that surrounds its name.

Now, while you’re standing in line on November the 14^th, you can explain to your fellow shoppers why the line has formed in the first place.

What’s your take on H&M & their supply of Choo’s shoes? Let’s hear about it in the comments!