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Notes: Each panel displays equilibrium values of a variable as a function of the fixed cost for product 1 for
the given values of the other parameters discussed in the main text; Panel (i) shows probability of firm
entry; Panel (ii) shows probability of firm exit; Panel (iii) shows the probability of supplying product 1
conditional on entry; Panel (iv) shows the probability of supplying product 2 conditional on entry; Panel (v)
shows the bias in firm productivity for firms supplying product 1; Panel (vi) shows the bias in firm
productivity for firms supplying product 2.
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Notes: Each panel displays equilibrium values of a variable as a function of the fixed cost for
product 1 for the given values of the other parameters discussed in the main text; Panel (i) shows
relative price indices; Panel (ii) shows the share of expenditure on product 1; Panel (iii) shows the
ratio of the productivity cutoffs; Panel (iv) shows the bias in aggregate productivity.

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