The problem with instant runoff and exhaustive ballot

Assume your organization is having an election for President by either exhaustive ballot or instant runoff. There are three candidates: A, B, and C. The preferences of the members are as follows:

  • 40% A > C > B
  • 40% B > C > A
  • 12% C > A > B
  • 8% C > B > A

In first ballot / calculation, A gets 40% of the votes, B gets 40%, and C gets 20%.

A
B
C

C, who has the least first-choice votes, is eliminated. Then A wins by a thin margin of 52%/48%.

A
B

By both exhaustive ballot and instant runoff, A wins the election. But what if B had been eliminated instead of C? C would have won the election over A by 60%/40%.

A
C

And what if A had been eliminated instead of C? C would have won the election over B by 60%/40%.

B
C

Is it fair that A won the election, when C would have beat both A and B in head-to-head match-ups? That's for you to decide. This problem is the core motivation behind Condorcet voting.