Question

Critically analyze the following statement with views of your own:
“There is no substitute for an airline pilot: Someone has to fly the plane. Therefore, an increase in the wage of airline pilots will not change the number of pilots used by the airlines.”

Answer 1

No the statement is not necessarily true. While it is indeed true that airplanes need a pitot, there can be a decreae in the number fo flights that an airline operates if the wage rates increase sufficiently. As the wages of the pilots increase, the cost for the airline firm increases and it is a variable cost. Thus, the marginal cost of flying an additional flight increases. The firm may cut down on operations of the profits are hurt and thus there may not be a need for as amny pilots as there are without the wage hike. Thus, the demand and number of pilots used by the airline may decrease.