N3

Please evaluate this statement using your economic knowledge & answer the following

Long-Run Growing Pains: "Billy-Bob is looking to grow his company of Burgers & Fries. He's currently bound to a kitchen lease that will soon expire. His employees are protected under minimum wage and his production process is heavily reliant on labor. BB is looking for a new, bigger kitchen but runs a rather slim budget and is sensitive to wages and rental rates. However, he spares no dime when it comes the quality of his food. There's nothing comparable to his burgers."

a. As BB's Burgers & Fries moves from the short-run to the long-run, elaborate on his potential level of wage sensitivity

b. If the minimum wage were to increase for burger flippers, illustrate this labor market, highlighting the effects BB's company would have given this change

c. What's the potential penalty if BB decides to pay his workers less than minimum wage