[The retailer’s customer b...] A discount retailer of basic household necessities employs thousands of people and pays most of them

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?

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.

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.

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

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.

The majority of the retailer’s employees work as cashiers, and most cashiers are paid the minimum wage.

Explanation:
The question to be resolved is why the mandated wage increase, which increased operating costs, was accompanied by an increase in profits. By showing how the wage increase might have led to an increase in the retailer’s sales, choice B helps resolve this question, and thus is the best answer.
Choices A and E are incorrect, since they suggest that the wages that rose as a result of the mandated increase constituted a significant proportion of the retailer’s expenditures, which if anything adds to the seeming paradox. Choices C and D also contribute to the paradox, since they indicate that along with increases in the minimum wage there were increases in the retailer’s operating costs; so choices C and D are also incorrect.

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