Final answer:
The statement that price and total revenue always move together in relation to the price elasticity of supply is false. Total revenue changes with price are dependent on whether the demand is elastic, inelastic, or has unitary elasticity.
Step-by-step explanation:
When considering the price elasticity of supply, it is not always true that price and total revenue move together. The statement that price and total revenue always move together in the context of the price elasticity of supply is false. The concept largely depends on whether the demand is elastic, inelastic, or has unitary elasticity.
If the demand for a product is elastic, a decrease in price is compensated for by a greater percentage increase in the amount sold, thus increasing the total revenue. Conversely, if demand is inelastic, an increase in price will result in a smaller percentage decrease in the amount sold, leading to higher total revenue. In the case of unitary elasticity, changes in price do not affect the total revenue, as the percentage change in quantity demanded will offset the percentage change in price.
For instance, if a band is considering ticket prices and the demand for their tickets is elastic, they should reduce the price to increase total revenue. If the demand is inelastic, they should increase the price. When the demand has unitary elasticity, they can set the price at a level where the total revenue remains constant, regardless of moderate price changes.