A discount retailer of basic household necessities employs thousands of people and pays most of them at
the minimum wage rate. Yet following a federally mandated increase of the minimum wage rate that increased
the retailer’s operating costs considerably, the retailer’s profits increased markedly.


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


(A) Over half of the retailer’s operating costs consist of payroll expenditures; yet only a small percentage of
those expenditures go to pay management salaries.
(B) The retailer’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 retailer’s 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, the retailer also raised the age rate for
employees who had been earning just above minimum wage.
(E) The majority of the retailer’s employees work as cashiers, and most cashiers are paid the minimum wage.

Though federal wage increase lead to increased operating costs, still retailers profits increased! now that's the paradox, we can resolve it by showing how the wage increase might have led to an increase in the retailer’s sales! That's exactly what B does.

hi --

1/ please post at least one specific question about this problem. don't just post a problem by itself.
what do you already understand? what is confusing you? etc.

2/ this is an OG verbal review problem. is it also in the gmat prep software?
if this problem is in the gmat prep software, please post a screenshot on this thread in the next week or so. otherwise, we will have to delete the thread.

thanks