Google AdWords is an advertising system that is based on auctions where you can set the amount of payment; you can pay with each click you will get with the ads placed by Google. With the Google AdWords, you compete in real life auction.
Google AdWords is somewhat like a vickery auction, in which winner pays only one more penny than the second last bidder. Here in Google AdWords, winner advertisers are determined by rank of the ads not by maximum bid.
The bidder that wins the highest place and the highest place or rank gets many clicks. Your goal should be such that you reach at the highest place to get the maximum clicks.
Quality score is the relevancy of your ad to the users; this decides that how much you will have to pay for an advertisement. Therefore your goal should be to achieve the great quality score so that you need to pay less.
Google determines the quality score of an ad by Click Through Rate (CTR), previous performance of that keyword, the relevancy factors like relevancy of title in the ad. A higher CTR will help you to get high quality score for a keyword, which will increase rank of the ad. It means if you get high quality score then you need to pay less for per click.
Google does not display those advertisements that have a low quality score, which means users are not getting those ads as relevant as per their needs or requirements.