How can an increase in the minimum-wage affect the restaurant industry?

Question

Quizplus · Accepted Answer

Increasing the minimum wage can lead to an increase in labor costs for restaurants, prompting them to raise menu prices. This increase in prices may lead to a decrease in demand, creating a surplus of workers. On the other hand, the increase in wages may also attract more workers to the industry, creating a shortage of workers. Therefore, both B and C can happen as a result of increasing the minimum wage.

How Can an Increase in the Minimum-Wage Affect the Restaurant