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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.
Impacts of Price Changes on Consumer Surplus. Consumer surplus decreases when price is set above the equilibrium price, but increases to a certain point when price is below the equilibrium price.