have been awarded the State 'Seal of Quality," 

 prices may include a special incentive markup 

 amounting to 0.5 to 1.0 percent of the prof- 

 itability norm, but under the condition that 

 this does not increase the producer's share 

 of economic returns by more than 50 percent. 

 This markup is established for a period of 3 

 years and can be lifted if the article does 

 not meet high quality standards during the 

 next certification. 



In turn, permanent wholesale prices on new 

 products may be fixed for a limited period 

 of time and in stages. Such differentiation 

 has the goal of imparting to price formation 

 additional effectiveness as a weapon for re- 

 moving from the market obsolete products, as 

 well as preserving the fair distribution of 

 economic gains produced by the application 

 of new technology between the producer and 

 the consumer as the cost of production de- 

 creases. Step-like, sequentially lowered 

 prices are therefore established for prod- 

 ucts whose costs are particularly elastic in 

 relation to the volume of the series which 

 saturates the internal market to a high de- 

 gree and also for products with high rates 

 of obsolescence. °9 



Important elements of this description are the at- 

 tempt to tie product prices to a measure of quality 

 and the intent to divide the "benefits" or economic 

 returns on a new product between the producer and the 

 consumer, thereby rendering the product advantageous 

 to both. This benefit is transmitted through the ef- 

 fect of higher prices on establishment success indi- 

 cators and, hence, on the primary bonus fund. And, 

 finally, the step-wise character of pricing is in- 

 tended to promote product turnover. Imparting price 

 flexibility by administrative means is costly and 

 cumbersome, but promises benefits. 



Other recent efforts relate the size of primary 

 bonus funds to technological advance and the evalua- 



230 



