Final answer:
Storage facilities that are not owned or leased by a single goods-producing firm are known as public warehouses. They offer flexibility in managing inventories, which is especially helpful for small 'Mom and Pop firms' that may continue to operate for reasons beyond economic profits, including community service and personal fulfillment.
Step-by-step explanation:
Storage facilities that are not owned or leased by a single goods-producing firm are known as public warehouses. These facilities provide a range of services such as storage, handling, and transportation facilities to different businesses on a rental basis. They are an essential component of the supply chain for goods such as food, clothing, and durable items like cars and refrigerators.
Public warehouses can help businesses, including small "Mom and Pop firms" like inner city grocery stores, manage their inventories more effectively. For example, during times when business is worse than expected, and inventory levels rise, these small businesses might not have the capacity to store excess goods. Utilizing public warehouses can be a flexible solution that adjusts to business fluctuations without significant investment in private storage spaces.
Despite not earning economic profits, "Mom and Pop firms" may continue to operate due to non-economic factors such as community service, personal satisfaction, or legacy considerations. These small businesses may value the direct relationship with their community and customers, providing a level of service that extends beyond mere profit.