The paper investigates a two-stage competition in a vertical di?erenti- ated industry, where each .rm produces an arbitrary number of similar qualities and sells them to heterogeneous consumers. We show that, when unit costs of quality are increasing and quadratic, each .rm has an incentive to provide an interval of qualities. The .nding is in sharp contrast to the single-quality outcome when the market cover- age is exogenously determined. We also show that allowing for an interval of qualities intensi.es competition, lowers the pro.ts of each .rm and raises the consumer surplus and the social welfare in comparison to the single-quality duopoly.