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Say that you work for U.S. Steel Corporation. Energy accounts for a significant fraction of U.S.? Steel's costs. One of its sources of energy is natural gas. Because of new methods of? production, such as hydraulic? fracking, the quantity of natural gas is increasing. Suppose that forecasters predict the quantity of natural gas will increase by 12 percent and you know the price elasticity of demand for natural gas is 0.5. U.S. Steel will be very interested in how much the price of natural gas will change.
Problem 1: The price of natural gas is predicted to change by _____________%?
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