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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.
5. If the expected future price of the product rises (falls), the supply curve in the present period shifts leftward (rightward). A change in supply also affects the price and quantity of the product. 1. An increase in supply (a shift rightward of the supply curve) causes the price to fall and the quantity to increase. 2. A decrease in supply (a shift leftward in the supply curve) causes the price to rise and the quantity to decrease