The elimination principle illustrates the idea that:

Question

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The elimination principle states that above-normal profits in a given industry will eventually be eliminated due to the entry of new firms, which increases competition and reduces profit margins. Option A is true, but it is not the premise of the elimination principle. Options B and D are not accurate because the elimination principle does not necessarily relate to losses being eliminated by either innovation or cost reduction.

The Elimination Principle Illustrates the Idea That