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CronoDAS comments on I want to learn economics - Less Wrong
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If the cost of shipping is less than the profit margin, that means that someone is willing to buy something from you for more than it costs you to make it - which, in an ideal market, is pretty much equivalent to having a comparative advantage. (I think.)
You're correct. Simple example here. Transportation costs are added to other costs, and the same analysis follows from there.
Transaction costs are not really different from other costs, economists just like to highlight them because they're often forgotten.
Sometimes. The existing competitors might lose more profit by dropping price to drive out the newcomer than they would by just allowing the competition. This should become more common as the cost of shipping becomes smaller relative to the profit margin.
If by competitive you mean "competition drives down prices as far as they will go," I would disagree that that's how the world works.