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The demand for a product is unit elastic.At a price of 20 10 units of a product are sold. If the price is increased to 40 then one would expect sales to equal: units. 5 units. 10 units. 20 units.

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Julio experto · Tutor durante 3 años
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Respuesta

To determine the expected sales when the price is increased from 40 for a product with unit elastic demand, we need to understand what "unit elastic" means. Unit elastic demand implies that the percentage change in quantity demanded is equal to the percentage change in price. In other words, the total revenue (price multiplied by quantity) remains constant.Given:- Initial price ( ) = ) = 10 units- New price ( ) = $40We need to find the new quantity ( ).First, calculate the initial total revenue: ) using the new price and the fact that total revenue remains constant: Therefore, if the price is increased to $40, one would expect sales to equal 5 units.The correct answer is:5 units