16G iPhone Receiver Quit - I Can't Hear Callers

The phone receiver on my new 16G iPhone no longer works. I can't hear people I call (or who call me) although they can hear me perfectly well.
The only way I can hear people who call is if I plug in the earphones, or if I use the speaker phone option.
The volume level has been turned up to maximum when calling and the mute button is not activated.
If anyone has any clues what is going on or what I should do, please let me know.
I noticed this problem the day after plugging in my earphones and watching a movie. It's almost like the phone is acting as though the ear phones are still plugged in, which of course, they're not.
Would appreciate any ideas and suggestions.

First off, please don't get me wrong. Even with two trips to the local AT & T store (one because it wouldn't activate and one because the phone jack sensor was bad) and having to pay a $49 restocking fee to replace the defective iPhone, I still very much like the product and am quite happy to have it. My replacement iphone is working perfectly.
I'm a big Mac fan. It's just that when you pay $500 for a phone, it should either work when you walk out of the store, or when you unpack it and discover that it doesn't, you should at least be able to return it immediately for an exchange. People living out of a big city don't have an option of running in to a local apple store, and so while I certainly wouldn't expect a local AT & T to repair an iPhone, if you buy a bad phone that doesn't work, you should be able to exchange it immediately for a functional one. After all, that's what they agreed to sell you when they took your money. The store should bear the burden of returning the product to apple if it failed immediately. Statistically, we know that no matter how good of a general manufacturing process apple might have, there will be defective parts in a small proportion of individual new electronic appliances, even if they are factory tested before being shipped to the reseller. I just happened to purchase a statistical fluke.
But all that said, I'm still happy with the iPhone even if it cost me extra time and money. And I'm also very happy about the responsiveness of this forum.
The users of this forum were extremely fast to respond to my questions and very helpful in resolving the activation problem and identifying the earphone jack sensor problem.
So thank you very much to this forum! You're a good group!

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Try taking a look at this support document to see if the steps there help. If you can't hear a person on a call or voicemail or if the sound quality is poor on iPhone - Apple Support

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I have a 2 month old iphone 5 replacement from Apple.
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As I have said this has worked twice now so I will be leaving my bluetooth off unless I am driving to see if it cures the issue.
I am certain this is not a hardware fault as my wife has had this with her iphone to me also once so why would she also have the issue on her iphone 5c?
I know this is not the fix for everyone as some users do have hardware issues and are hitting their devices and some are putting cardboard into the iphone.
Apple if this is a fault with the bluetooth then please look more into it on your next update, however it may just be that it's my old carkit or any other bluetooth devices interfering with our iPhones.
Perhaps having the bluetooth on confuses the iphone randomly into thinking it's connected to a listed device when it's not, muting the mics.
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I have an article fro you that can help you troubleshoot this issue with your iOS device:
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Read this if you can't hear callers or voicemail o...

If you can no longer hear callers, cannot hear your voicemail, and are tearing your hair out trying to get any help from the obvious sources (your service provider, Nokia, your local store) - do not panic.
Call 121, as if you are making a vm call. While it is connecting, adjust the volume control button on the right of the phone. You will find that this volume control button operates on a 1-10 scale and is completely different from the one that is normally adjustable from the main screen, which operates on a 1-30 scale. Hopefully you will start to hear the recorded voice and all will be well.
This is not mentioned anywhere in the handbook or any of the online resources. I eventually found a clue via a different help site - but couldn't find where the 2nd volume control was. Thank goodness I eventually stumbled upon it by accident.
I know I am not the only one to have lost connection with a caller half-way through a conversation. It must be a design fault of some sort. I am just relieved that I did not follow the Nokia diagnostics advice to reset my phone to factory settings (after backing up etc etc), or pay out vast ££s for the privilege of sending off my phone for a non-existent repair.
I am not techy - but I am posting this in the hope that it will save others the frustration, expense and time I have wasted over the past 3 days trying to get any sense out of Vodafone and Nokia. (I am sorry if that breaches some form of discussion board protocol - but it is a fact.)
If anyone from Nokia is reading this will you PLEASE update your handbooks to include this information, and take account of it within your online diagnostics page, which told me to restore factory settings. (Fortunately I have no idea how to backup data on my phone, and the advice didn't tell me either.)
If anyone from Vodafone is reading this, will you PLEASE train your sales staff and helpdesk staff to understand this problem.
Feeling calmer now ... off to make a large mug of coffee.

This is normal an also the same with other phone brands and OS. Even on android and IOS the call volume is different from the general volume of the phone. If you have a non-lumia nokia phone, it is also the same.

16G iPhone Receiver Quit - I Can't Hear Callers

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