and (b) in the long run. 2. The management of the Mini Mill Steel Company estimated the following elasticities for a special type of steel: EP=2, EI=1, and EXY=1.5, where X refers to steel and Y to aluminum. Next year, the firm would like to increase the price of the steel it sells by 6 percent. The management forecasted that income will rise by 4 percent next year and that the price of aluminum will fall by 2 percent. ( a ) If the sales this year are 1,200 tons of the steel, how many tons can the firm expect to sell next year? (b) By what percentage must the firm change the price of steel to keep its sales at 1,200 tons next year