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Besides the manager and owner, Antonio’s Pizza


Besides the manager and owner, Antonio’s Pizza is staffed by 15 high school students who are paid minimum wage.  The government passed a statute two month ago raising minimum wage by 9%.  Though this led to a considerable increase in costs to Antonio’s Pizza, profits have increased markedly.  

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

A.  Over half of Antonio’s Pizza’s operating costs consist of payroll expenditures; yet only a small percentage of those expenditures go to pay the salaries of those that work in the kitchen.  

B. Antonio’s Pizza’s customer base is made up primarily of people who earn, or who depend on the earnings of others who earn the minimum wage.

C.  The operating costs, other than wages, increased substantially after the increase in the minimum wage rate went into effect.

D.  When the increase in the minimum wage rate went into effect, Antonio’s Pizza also raised the manger’s wage rate.

E.  The majority of Antonio’s Pizza employees work as cashiers, and most cashiers are paid the minimum wage.
 
The best answer is B.  By showing how the wage increase might have led to an increase in Antonio’s Pizza’s sales, choice B helps resolve this question.

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