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.

To determine the expected sales when the price is increased from $20 to $40 for a product with unit elastic demand, we need to understand what "unit elastic" means. <br /><br />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.<br /><br />Given:<br />- Initial price (\(P_1\)) = $20<br />- Initial quantity (\(Q_1\)) = 10 units<br />- New price (\(P_2\)) = $40<br /><br />We need to find the new quantity (\(Q_2\)).<br /><br />First, calculate the initial total revenue:<br />\[ \text{Initial Total Revenue} = P_1 \times Q_1 = 20 \times 10 = \$200 \]<br /><br />Since the demand is unit elastic, the total revenue should remain the same even after the price change.<br /><br />Now, calculate the new quantity (\(Q_2\)) using the new price and the fact that total revenue remains constant:<br />\[ \text{New Total Revenue} = P_2 \times Q_2 = \$200 \]<br />\[ 40 \times Q_2 = 200 \]<br />\[ Q_2 = \frac{200}{40} = 5 \]<br /><br />Therefore, if the price is increased to $40, one would expect sales to equal 5 units.<br /><br />The correct answer is:<br />5 units