To analyze the effect of the transformation from \( f(x) = \frac{1}{x} \) to \( g(x) = \frac{1}{x} - 12 \), we need to consider how the graph of \( f(x) \) is altered by the function \( g(x) \).
- \( f(x) = \frac{1}{x} \) is the original function.
- In \( g(x) = \frac{1}{x} - 12 \), we see that the term \(-12\) has been added to the function.
This represents a vertical shift of the graph. Specifically, subtracting a value from a function will shift the entire graph downward by that value. Since we have \(-12\) added to the original function, the graph of \( g(x) \) shifts down by 12 units.
Thus, the correct option is:
Option #2: It shifts down 12 units.