You can probably immediately see that the "price as an indicator of quality" problem can be explained in an analogous way and we can even use the same graph. When people use price as an indicator of quality it is still the case that, for a given perceived level of quality a lower price will lead to greater sales and so on, just as in the "snob effect" case.

Suppose for the first time hydrogen powered fuel cell laptop batteries that are supposed to last for days, rather than hours, between recharging (with hydrogen) are being offered for sale. Since such a product has not existed before it is just the type of product for which consumers may well use price as an indicator of quality. This is particularly true since it will go into their valuable laptop computers and because they use hydrogen, which is explosive. The manufacturers claim they are very safe, don't generate excess heat, weigh less than lithium ion batteries and can be made to fit any laptop and so on... If battery A retails for $199 and battery B retails for $320 some people will feel more comfortable buying battery B under the assumption that the higher price means it's a higher quality product. However, if two different vendors carry battery B and one sells it for exactly $320 and the other sells it for $290, most people would prefer to buy it from the one who sells it for $290. Why? Because the quality perception is conveyed not in what is actually paid, but in the suggested retail price. Once the quality perception is formed, the resulting demand curve is downward sloping, just like any other.

Thus, the graph to the right works for this problem too. Higher suggested prices shift up the demand curve as they increase the perceived quality. However, for any given level of perceived quality consumers will buy more the lower the price and so on, just as in the case of the snob effect.