Final answer:
Small 'Mom and Pop' businesses continue to operate without significant profits due to non-monetary benefits, covering operating costs, local loyalty, and their role in the community, as well as legacy reasons.
Step-by-step explanation:
Understanding Small Business Survival
Small 'Mom and Pop firms,' like inner-city grocery stores, are often found operating even without earning substantial economic profits. To explain this phenomenon, we can look at various factors that contribute to their persistence. Firstly, these businesses may provide the owners with non-monetary benefits, such as the satisfaction of being self-employed or serving the local community. Additionally, these small firms might cover their operating costs and provide just enough for the owners to sustain their livelihood without extra profits.
Furthermore, some small businesses are buoyed by favorable local loyalty, where customers prefer to shop locally to support neighbors and friends, regardless of price differences when compared to larger chains. Often, these businesses play a crucial role in their communities by offering access to goods and services that might otherwise be unavailable.
Lastly, 'Mom and Pop' stores may remain operational due to legacy reasons, where the business is passed down through generations and maintains a historical significance to the family and community, outweighing the need for high economic profits.