a) Sometimes, small stores continue to operate - even though they do not earn economic profits. Are such decisions logical?

These type of decisions require a lot of additional information. It is not always black and white. Also Profit can be a vague term, most (if not all) business require an initial investment to get up and running. Sometimes that initial investment takes months or even years to recover. In that case you would not be making profits for a really long time, but if you decide to close down you will lose any possibility of recovering the initial investment.

Other times a small store may not be making any profits because it is a slow time of the year for sales. So they decide to wait till end of year where they can more than make up for the slow sales from the rest of the year.

Now if a store is losing money and continuously without a strategy to turn things around in the short term, then it might not be logical to keep the store open. Instead of adding more money to the investment of the store without paying off the initial investment for the start of the business.

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