Firms compete by offering different prices and qualities in markets where consumers have different preferences. They can sell two goods together or separately. The study looks at two ways firms can compete: by offering fixed price-quality pairs or by letting consumers choose from a range of price-quality options. The research compares what happens when firms sell both goods or just one. The results show that how markets are organized affects quality, efficiency, and overall welfare. This can be seen in real-life examples like how mental health coverage is often separate from general health insurance, or how schools may favor low-cost students in areas with multiple school options.