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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.
People also are able to buy more at a lower price because of the income effect-their real incomes have increased. A change in quantity demanded occurs when there is a change in the price of the good. A change in demand occurs when there is a change in any factor that affects demand other than price.