Inflation is typically measured by the price of a basket of goods and services designed to be representative of what is actually consumed. If the shrinking or g

Inflation is typically measured by the price of a basket of goods and services designed to be representative of what is actually consumed. If the shrinking or growing of offerings simply changes what is consumed, then there is no real inflation change. What is measured depends on the definition of the basket of goods (does it contain "Mars bar" or "62.5g of chocolate bar"). The definitions of baskets of goods used to measure inflation tend to be changed over time to represent changes in consumption, such as 27" TV to 32" like you mention. As the 32" TV would be more expensive, this would create sudden inflation, however, this is diluted by the large size of the basket. The quantity or size of the product is not important for measuring inflation, unless it creates a change in consumption. E.g. do people now buy two chocolate bars to sate their appetite? Do people buy fewer TVs because a TV of twice the areal size can substitute two smaller TVs?