Quote:
Originally Posted by IliketoPuck
Sorry?
How the hell does increasing his costs increase customer demand.
Jim has a hardware store. He sells hardware. He competes against Home Depot, Canadian Tire, Lowe's, Rona.
He doesn't have the purchasing power to not pass through increased costs to customers, therefore he can't compete and there is no normalization.
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Jim does not exist in a vacuum. Last I checked, there are roughly 2000 full-time minimum wage workers in Alberta. Since the minimum wage increased, those people have seen their income go up by 10% this year, and will see it go up by 50% over the next few years, which should in turn provide them with more disposable income. So Jim's customer base has the potential to increase, thereby increasing the demand for his products.