Hardware stores (excluding Lowe’s and Home Depot) in a large city would seem to be an example of a competitive market, since there are many sellers operating relatively small shops, each seller takes the price of hammers or nails as given, and the products (hammers, nails, etc.) are very similar between different shops.
a. How could you argue that the hardware store market is not competitive?
b. Is it possible that each hardware store could face a demand curve that is not perfectly elastic?
c. How profitable do you expect hardware stores to be in the long run?