Sounds like a pipeing problem to me. Check to see if any of your pipes are galvanized steel pipes, they may be in need of replacement.

You may have the upper thermostat set at a higher temp than the lower. The lower should be set slightly higher than the upper, so that the lower is the one doing the heating.

Only one of the 2 heating elements works at a time. The upper thermostat runs the upper heater, the lower one runs the lower. If the upper one is set higher, thereby keeping the lower one from turning on, you will have very limited hot water.

Come to think of it -- did you set them at all? They may have come set at the lowest setting. You might try setting the upper at 120 and the lower at 125 degrees.

Still no luck. We tried to change the temperature levels on both the upper & lower heating elements. We've also replaced the upper thermostat. Again, this is a brand new 50 gallon hot water heater, not even 1 week old. We should have enough hot water for 2 showers, right? Any other suggestions?

Did you fill the tank before turning the power back on? If power is supplied to the elements before they are submersed in water then they will blow within seconds. If you have an ohmeter you can test them without removing them.

do you have a mixing valve in the house? or somthing may be crossing over such as a clothes washer valve, (hot and cold mix)

When you say "I still do not have enough..." this suggests to me that you had the same problem before getting the new heater.
True? If so, then the problem must not be in the water heater.
Here's a question: when you run low on hot water from trying to take 2 showers, do the sinks still get hot water? If they do, then the problem might be more related to the shower than the water heater. Do you have more than one shower in the house? If so, do they both act the same way?

Hi abfox

I never bother to post to bulletin boards but these other guys are not giving you any good information :-)
Most of the time 2 showers from a 40 gallon tank is pushing your luck. There are different things that can effect how long your hot water will last, but I would bet money that if you replace your shower head to a low flow type you will get 2 showers before running out.
I used to service hot water heaters and yours is the most common problem.

The first thing I would check is the power source, clearly this was a problem before the heater was changed and continued after the new heater was installed. Electrician in the house? erik