The price elasticity of demand for dental services is 0.25. In a market with 100 dentists, the

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The price elasticity of demand for dental services is −0.25. In a market with 100 dentists, the local dental society demanded and received an 8 percent increase in prices from the dominant dental insurance company. What should happen to the dentists’ revenues and profits? (Assume that average costs equal marginal costs.) Would this agreement be stable? Explain.

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