Bunuel wrote:
Thousands of people work at G. Handy's, an inexpensive fast-food restaurant chain that pays most of its employees minimum wage. Even though new laws forced an increase in the minimum wage, and thus substantially raised the restaurant chain's labor costs, its profits also rose substantially.
Which of the following, if true, most helps to resolve the apparent paradox?
A Only a very small part of the 70 percent of operating expenses paid by the restaurant chain for employee compensation goes to pay managers.
B People who earn minimum wage, or who rely on the earnings of others who do, comprise most of the restaurant chain’s customer base.
C Other expenses of the restaurant chain rose dramatically after the wage hike, for reasons unrelated to the minimum wage raise.
D The restaurant chain decided to increase wages for managerial employees who were making slightly more than minimum wage simultaneously with the minimum wage increase.
E Cashiers and cooks, who are usually paid minimum wage, comprise most of the staff at the restaurant chain.
Project CR Butler: Critical Reasoning
For all CR butler Questions Click HereA Only a very small part of the 70 percent of operating expenses paid by the restaurant chain for employee compensation goes to pay managers.
How the increase in pay was distributed is not in question here. + It is not helping in resolving the paradox in any case.B People who earn minimum wage, or who rely on the earnings of others who do, comprise most of the restaurant chain’s customer base.
If that's the condition then increase in wage will lead to increase in consumption hence increase in profit. Perfectly explains the paradox.C Other expenses of the restaurant chain rose dramatically after the wage hike, for reasons unrelated to the minimum wage raise.
It is supporting the point that increase in pay was also accompanied by rise in other expenses also but it is still failing to explain the increase in the profit portion.D The restaurant chain decided to increase wages for managerial employees who were making slightly more than minimum wage simultaneously with the minimum wage increase.
Same as A.E Cashiers and cooks, who are usually paid minimum wage, comprise most of the staff at the restaurant chain.
Same as A.