Liggett gets much of its tobacco revenue from discount cigarettes, which provide a lower profit.

Mr. Goldman predicts that discount cigarettes will account for 40 percent of the market in two years.

Still, the discount cigarettes known as generics have become the industry's most successful product introduction, indicating some price resistance among smokers.

The best-selling, indeed the only, new products in the last two years have been discount cigarettes.

Industry experts respond that most of those studies were done four or five years ago, when discount cigarettes were not widely available.

But more important, further population growth in the groups likely to want discount cigarettes will help even more.

The rise in tobacco excise taxes has helped stimulate development of a lucrative new market niche - discount cigarettes.

This might induce manufacturers to supply more discount cigarettes, a practice that would reduce tax regressivity.

But sales of discount cigarettes are growing and the industry is devising new ways to market all of its products.

Generic and other discount cigarettes had 1 percent of the market in 1982.