The state retained planned prices and quotas while allowing above-quota output and some inputs to trade at negotiated or market prices. This gradual approach avoided a single shock to state allocation and created incentives, but the gap between tracks opened opportunities for arbitrage and corruption available mainly to officials and connected firms.
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How did dual-track pricing work?
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Explanation
The dual track retained planned allocation while permitting some surplus goods and inputs to trade at market prices.
Dual-track pricing replaced every planned price with a market price at once.
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Explanation
It retained planned quotas and prices alongside market transactions.