The correct option is 2 and 3 only.
Explanation
The "Dual Pricing" or "Dual-Track System" was a crucial economic reform introduced in China starting in the late 1970s. It served as a transitional mechanism to shift from a rigid central command economy to a market-oriented economy. The core principle was to maintain stability through state control while incentivizing production through market forces.
Statement-wise Analysis:
- Statement 1 is Incorrect. The term "Dual Pricing" does not refer to fixing different prices for farmers versus industrial units. Instead, it refers to the coexistence of two distinct pricing mechanisms-state-fixed prices and market-determined prices-applicable to both sectors. The duality was based on the quantity of output (quota vs. surplus), not the sector (agriculture vs. industry).
- Statement 2 is Correct. Under this system, both farmers and state-owned industrial units were obligated to produce and sell a specific mandatory quota of inputs and outputs at prices fixed by the government. This ensured the stability of the planned economy and guaranteed supply for essential sectors.
- Statement 3 is Correct. To encourage efficiency and higher production, the reform allowed farmers and industrial units to sell any output produced above the mandatory government quota at market prices. This introduced profit incentives and gradually exposed producers to market dynamics.
Key Takeaway:
China's Dual Pricing reform involved a two-track approach: a planned track (fixed quotas at state prices) to ensure stability, and a market track (surplus production at market prices) to stimulate growth and efficiency.