The quality setting affects the compression level of the JPG image:
PNG (Portable Network Graphics) is a lossless image format that supports transparency and is ideal for web graphics, logos, and illustrations.
JPG/JPEG (Joint Photographic Experts Group) is a lossy compression format best suited for photographs and complex images with many colors.
Converting from PNG to JPG may reduce file size significantly, but will remove transparency and may slightly reduce image quality depending on the compression settings.