The elimination principle:
A) holds in all places and in all times.
B) says that below-normal profits may be eliminated by the entry of new firms.
C) depends on government protection.
D) says that above-normal profits are eliminated by entry and below-normal profits are eliminated by exit.

Question

Quizplus · Accepted Answer

The elimination principle states that above-normal profits will be eliminated by entry of new firms, and below-normal profits will be eliminated by exit of existing firms. This is a fundamental principle in economics that applies in all market structures, not just those with government protection. Therefore, option D is the best choice.

The Elimination Principle