At the beginning of 2004, Congress enacted a 15%

Good one to leave one bewildered for sometime..

Here goes my understanding -

1. Congress enacted a 15% increase in minimum wage

2. Charlesville Hotdog and Beef Company employed 5,000 employees, though most of it's employees were working above minimum wage.

3. Despite increase in Operating Expenses the Company's Profit Increased.

The Firms must have maximized its production to compensate for the hike in Operating Cost



Which of the following, if true, most helps to resolve the apparent paradox?


Paradox = How can an increase in Operating Costs ( Wages ) lead to record Profits


(A) Charlesville Co. spends more money procuring cows for their Hotdog and Beef products than they do paying their 5,000 workers.

This action will increase the operating costs further.

(B) Charlesville Co. also saw an increase in expenses other than its wages in 2004.

Increase in Operating Costs

(C) Before 2004, the company had considered giving its employees a 15% raise, but ultimately decided not to do so.

Out of Scope

(D) The company's customer base is made up primarily of families that rely on minimum wage incomes.

If the Customer's income increases they will purchase more and thus the rise in Operating Expenses can be distributed evenly on a broader number of Products sold and thereby increasing the profits.

(E) The majority of the company's 5,000 employees work in the company's meat-packing facilities.

Its not clear how this is resulting in Profits from sales from this statement.