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Price Point Impact. Even with a linear demand curve, price elasticity for any product. (including tobacco) varies as the price for that product varies. De-. mand tends to be relatively inelastic at lower price levels (due to. smaller income effects), but grows more elastic as price increases.
Definition. The impact that a change in value has on the consumer demand for a product or service in the market. The price effect can also refer to the impact that an event has on something's price. The price effect consists of the substitution effect and the income effect.