Final answer:
The key concept in collecting the most revenue is the price elasticity of demand. If demand is elastic, cutting the price will result in larger sales and higher revenue. If demand is inelastic, raising the price will result in smaller sales but higher revenue. If demand has unitary elasticity, the revenue will be the same regardless of price changes.
Step-by-step explanation:
The key concept in collecting the most revenue is the price elasticity of demand. The formula for total revenue is price times the quantity of tickets sold. If demand is elastic at a certain price level, the band should cut the price because the percentage drop in price will result in an even larger percentage increase in the quantity sold. On the other hand, if demand is inelastic at the original quantity level, the band should raise the ticket price because a certain percentage increase in price will result in a smaller percentage decrease in the quantity sold, and total revenue will rise. If demand has unitary elasticity at that quantity, then an equal percentage change in quantity will offset a moderate percentage change in the price, resulting in the same revenue whether the price is increased or decreased.