Struggling with “Never reason from a price change”

Scott Sumner at http://www.themoneyillusion.com/ regularly reminds his readers to “never reason from a price change”. Which, if I understand it correctly, means never to assume that certain things will happen if the price of something changes. He’s given various examples – the price of X dropping might increase demand for X or it might be dropping because demand for X is already dropping and the price change won’t have any effect

But I struggle with this sometimes. For example, the other day, on the topic of raising the minimum wage at restaurants, Kevin Drum said “since it affects all restaurants, they’re all in the same boat, and people will still go out to eat”.

Megan McArdle at Bloomberg pointed out that if restaurants raise prices, people can also choose not to eat out as much.

Which seems manifestly true, but also seems like she’s violating the Sumner Principle. What am I missing?

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