Final answer:
The decrease in the price of chicken wings is likely due to new fryer technology that increases the supply by reducing cooking time and production costs, thus lowering the equilibrium price according to demand and supply theory.
Step-by-step explanation:
The recent decrease in the market price of chicken wings in a university town has sparked a debate among economics students, who propose different theories guided by the principles of demand and supply. One argument is that the decrease in price is due to a new technology that allows restaurants to cook chicken wings in half the time, effectively lowering production costs and increasing supply, which can lead to a lower price according to supply and demand models. Another theory suggests that the increase in the price of french fries, a related good, caused by a rise in potato prices, led consumers to substitute chicken wings for the now more expensive french fries, thereby increasing the demand for chicken wings. However, this does not align with these students’ assertions, as an increase in demand (while supply remains the same) would typically lead to a higher price for chicken wings, not a lower one.
Considering economic theory, the new fryer technology that speeds up the cooking process of chicken wings is a more plausible explanation for the decrease in price, as improvements in production technology lead to an increase in supply, which can drive prices down. A more efficient cooking method would enable suppliers to offer more chicken wings at a lower cost, potentially reducing the market price if all other factors remain constant. This situation aligns with examples of how changes in technology or input costs affect market equilibrium prices and quantities.