Stacy's, a Chain of Discount Stores in Washington, Employs Thousands

Stacy's, a chain of discount stores in Washington, employs thousands of people and pays most of them at the minimum wage rate. Following a federally mandated increase of the minimum wage rate, Stacy's operating costs increased considerably. Yet, the chain's profits increased markedly. Which of the following, if true, helps explain this situation?

A) Over half of Stacy's operating costs consist of payroll expenditures; yet only a small percentage of those expenditures go to pay management salaries.
B) Recently, two new competitors entered the market.
C) Stacy's customer base is made up primarily of people who earn a minimum wage or who depend on the earnings of others who earn a minimum wage.
D) Stacy's operating costs, other than wages, increased substantially after the increase in the minimum wage rate went into effect.
E) Stacy's plans to expand its market by opening stores in the states of Oregon, Idaho and Nevada.