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The increase
in the price of dental services
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has also
reduced our real income - we can
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now buy less
than before with our money
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income.
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The way which we react to this change in
real
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income
depends on the kind of good or service.
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Is dentistry
a normal good ?(an increase in income
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leads to an
increase in demand and vice versa. So
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a fall in
real income will further reduce the amount
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of treatment
bought (income effect).
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