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.(True Answer
)Correct

Question

Quizplus · Accepted Answer

The elimination principle states that above-normal profits are eliminated by entry of new firms while below-normal profits are eliminated by exit of existing firms. This principle holds true in all competitive markets, regardless of government protection or regulations. Choice D is the correct answer.

The Elimination Principle