Final answer:
The statement that all revenue management strategies use differential pricing to maximize earnings is false, as revenue management is highly dependent on the price elasticity of demand, and elasticity informs whether prices should be raised, lowered, or can remain the same to maximize revenue.
Step-by-step explanation:
The statement that all revenue management strategies use differential pricing as a critical lever to maximize earnings is false. While differential pricing is a commonly used strategy, it is not the only one. The central concept in revenue management is understanding the price elasticity of demand. When demand is elastic, a decrease in price can lead to a proportionally larger increase in the quantity sold, thus raising total revenue.
Conversely, with inelastic demand, an increase in price can lead to a proportionally smaller decrease in quantity sold, which also results in increased total revenue. If demand has unitary elasticity, the revenue stays the same whether prices are moderately increased or decreased. Revenue management strategies can thus vary depending on the elasticity of demand for the goods or services being sold.