  Consumers in many markets are uncertain about firms' qualities and costs, so
buy based on both the price and the quality inferred from it. Optimal pricing
depends on consumer heterogeneity only when firms with higher quality have
higher costs, regardless of whether costs and qualities are private or public.
If better quality firms have lower costs, then good quality is sold cheaper
than bad under private costs and qualities, but not under public. However, if
higher quality is costlier, then price weakly increases in quality under both
informational environments.
