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Look at books on your bookshelf with dialog. I think you'll find that each new speaker does indeed start a new paragraph. The first line indent is correct.
As for the space above and below a paragraph. This is a choice of your formatting and/or the ebook renering software. I prefer not to have such spaces in ebooks, and I'd recommend that (if you are applying them) you remove them from all paragraphs.
But if you choose to/have to keep them, then they too are correct between speakers.
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