Dual system of pricing exist in Mixed Economy

In a mixed economy, the dual system of pricing refers to the coexistence of both market-based pricing and government-regulated pricing. This means that while some goods and services are priced through the forces of supply and demand in a free market, others are determined and regulated by the government.

Here is a detailed explanation of why the correct answer is option 'C' (Mixed Economy):

Definition of Mixed Economy:
A mixed economy is an economic system that combines elements of both a market economy and a planned economy. It allows for private ownership and market competition, but also involves government intervention and regulation.

Coexistence of Market-based Pricing and Government-regulated Pricing:
In a mixed economy, market-based pricing is allowed for certain goods and services that can be efficiently allocated through the forces of supply and demand. This means that the prices of these goods and services are determined by market conditions, competition, and consumer preferences.

However, some goods and services, particularly those that are considered essential or have significant externalities, may be subject to government regulation. The government may intervene to set prices, control production, or impose subsidies or taxes to achieve specific social or economic objectives.

Examples of Dual Pricing System in Mixed Economy:
1. Essential Goods: The government may regulate the prices of essential goods such as food, water, and healthcare to ensure affordability and accessibility for all citizens. This is done to prevent price gouging and maintain social welfare.

2. Utilities: Certain utilities like electricity, gas, and water supply may be subject to government regulation to prevent monopolistic practices and ensure fair pricing. The government may set price caps or regulate tariffs to protect consumer interests.

3. Public Transportation: In many mixed economies, the government regulates fares and subsidies public transportation systems to promote accessibility, reduce traffic congestion, and address environmental concerns.

4. Education and Healthcare: The government may heavily regulate the pricing of education and healthcare services to ensure affordability and equal access to these essential services.

Advantages and Disadvantages of Dual Pricing System:
Advantages:
- Ensures affordability and accessibility of essential goods and services.
- Prevents monopolistic practices and protects consumer interests.
- Enables the government to address social and economic objectives.

Disadvantages:
- May lead to inefficiencies and lack of competition in regulated sectors.
- Can create market distortions and reduce incentives for innovation.
- Requires effective government regulation and monitoring to prevent corruption and abuse of power.

Overall, the dual system of pricing in a mixed economy allows for a balance between market forces and government intervention to achieve both economic efficiency and social welfare objectives.