He raises drink prices to maintain his profit. The bar down the street also raises prices because it’s a federal law. There’s nowhere for the customer to go. The weakest businesses that can’t operate at this level will close.

Or, some bar owner will decide they can take a smaller cut and will keep prices the same even with the wage increase. You know, because there are market forces that act on prices, too! Businesses don't just set prices wherever they please!

I prefer this angle for attacking lolbertarians on this point because (1) businesses do, in fact, set prices in response to market forces, and (2) it highlights that the inefficiency getting squeezed out of the market is the profit the owner is leeching off the business.