Final answer:
Mom and Pop firms may continue operating without economic profits due to the provision of personal service, non-economic benefits they provide to owners, and different financial priorities such as community service or personal fulfillment.
Step-by-step explanation:
Small Mom and Pop firms, such as inner city grocery stores, often continue to exist even when they do not earn economic profits. Several factors could explain this phenomenon. One reason could be that they provide personal service and convenience to a loyal local community that values the accessibility and familiarity of their offerings.
Another reason might be that the owners derive non-economic benefits such as personal satisfaction and community service. Additionally, these small businesses might be supplementing the family's income from other sources or may operate under a different set of financial priorities, where sustainability rather than profit maximization is the goal.
Profit isn't the sole objective for all business owners; some may prioritize community service, lifestyle, or personal fulfillment over monetary gain.