> But that assumes if you pay more quality increases as well.
It's just a thought experiment. In this situation, people would probably go for the higher quality, because they would know it's higher quality.
In reality, it's very hard to assess the quality of a product, that's correct. And that's my point: people do care about quality, it's just often very hard to have a good idea about it.
But that assumes if you pay more quality increases as well. But that is not always the case. Case in point my iphone which has display issues within 2 yrs and apple is expecting me to pay half the price of the device to fix it. Against my old android which is 4x cheaper and still working great after 2 yrs.
Quality should not be associated with price.