The iPhone 7 was launched without a headphone jack. This "innovation" is will mean
A)the CPI will understate inflation as cheap headphones must be replaced with more expansive wireless ones.
B)the CPI will overstate inflation because lack of a headphone jack is an example of a quality improvement.
C)the CPI will understate inflation due to the new product bias.
D)the CPI will overstate inflation due to the outlet bias as people buy new phones at iStores.
E)the CPI will understate inflation due to the outlet bias.

Question

Quizplus · Accepted Answer

The removal of the headphone jack in the iPhone 7 led to consumers needing to replace their existing headphones with more expensive wireless ones or adapters, which could lead to an understatement of inflation in the Consumer Price Index (CPI) if it doesn't adequately account for the increased costs consumers face for these accessories.

The IPhone 7 Was Launched Without a Headphone Jack