Question

Small "Mom and Pop firms," like inner city grocery stores, sometimes exist even though they do not earn economic profits. How can you explain this?

Answer 1

An oligopoly occurs when a few large businesses control the supply and availability of a certain product. An example of this is the U.S. automobile industry. ... Oligopolies are similar to monopolies in that the high cost of producing products such as automobiles can prevent smaller firms from entering the market.

Answer 2

Explicit and implicit costs, and accounting and economic profit (Page ... city grocery stores, sometimes exist even though they do not earn economi