Trade, the Internet, and product innovation have greatly enlarged the number of goods (<italic>N</italic>) in the consumer's choice set. The welfare effect of the growth in <italic>N</italic> has been extensively discussed in the specialized literature, but very little has filtered down to our textbook models of a competitive...

Trade, the Internet, and product innovation have greatly enlarged the number of goods ( N ) in the consumer's choice set. The welfare effect of the growth in N has been extensively discussed in the specialized literature, but very little has filtered down to our textbook models of a competitive...