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Inflation is the rate at which prices increase over a period of time.

See consumers every time prefer to have low-cost goods. And if the price of one fruit increases, they tends to substitute it for another low proceed fruit. So high price goods are not important for consumers in a fixed basket of goods and services required to measure inflation.

Further, if CPI doesn鈥檛 include new products, then the inflation measurement can鈥檛 be correct. And this happens because consumers think that if they purchase new goods, it will improve their cost of living and welfare. Moreover, new goods with good quality have increased price when they are launched in the market. Thus, CPI doesn鈥檛 account for the decline in price generally.

So that鈥檚 why the inflation rate for fruit doesn鈥檛 perfectly capture the price of food as it doesn鈥檛 account for substitution part by consumers which is called substitution bias and new product bias.