Tiny Epic Tactics

If a unit stands on the large 8x5 box and targets a unit on a smaller box (like 3x2), does the attacking unit gain +1 range?

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Yes
Elevation refers to the physical height of the map boxes. The large 8x5 Evergreen Forest map box is of a higher elevation than the other smaller boxes on the ground (3x2, 5x4 and 2x2), so targeting units, which are at a lower physical height, increases the attacking unit's range by 1.
Related Rule(s)