This chapter discusses how competition between firms affects the set of choices that are available to consumers. What do I mean by consumer choices? Throughout this chapter that will be a synonym for the range of different products or “variety” available for purchase. An increase in “product variety” can occur in, at least, two different ways: (a) the existing firms increase the number of different items that they sell or (b) new firms emerge bringing with them a new set of products. I will discuss examples of both.