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When a minimum-wage law changes a company’s cost, which is the main dimension involved?

Answer and explanation

Correct answer: Legal dimension

The correct answer is C, the legal dimension. A minimum-wage law is a compulsory rule issued through the legal and regulatory framework. It requires an employer to pay at least the prescribed wage, and compliance can increase labour expenditure and total production cost. The resulting cost change is economic, but the factor that causes it in the question is the law itself. The social dimension could involve changing attitudes toward fair wages or worker welfare, while the technological dimension would involve machinery, software or production innovation. Therefore, the classification should follow the stated source of the business impact: a statutory wage requirement. Whenever an Act, law, regulation or compulsory standard directly changes business decisions, the legal environment is the most appropriate answer.

Related tags

Business EnvironmentLegal EnvironmentMinimum WageLabour RegulationBusiness StudiesClass 12 Mcq

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