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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.
In the words of Lipsey, The price effect shows how much satisfaction of the consumer varies due to the change in the consumption of two goods, as the price of one changes, the price of the other and money income remains constant. [ ].