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Reasons that could account for existence of small firms

Answer Text:
Exisistence (survival) of small firms:
-Despite exisistence of economies of scale, There are several reasons that could account for exisistence of small firms in an economy: These are :
-They usually require little capital to start.
-Legal formalities required to start them are simple hence easy to start and run.
-Small firms can be served by small market size
-Small firms are easy to manage.
-Small firms face less risks.
-Small firms are very flexible in their operations.