Final answer:
The decrease in pizza prices is attributed by the first group of students to the use of new pizza ovens that halve the production time, thus reducing the production cost per pizza, allowing pizza shops to potentially lower prices while maintaining desired profit margins.
Step-by-step explanation:
The first group of students attribute the decrease in the price of pizzas to the introduction of new pizza ovens that reduce the time it takes to make a pizza. This technological advancement effectively lowers production times, increasing efficiency and enabling pizza shops to reduce their costs. The key idea here is that a decrease in production time often leads to a decrease in production costs because less labor and, potentially, fewer resources are needed for each unit of output.
According to economic principles, when firms experience a reduction in the cost of producing pizzas at the margin, which includes the cost of ingredients, the pizza oven, rent, and wages, they may choose to pass on some or all of these savings to consumers in the form of lower prices. This reduction affects the supply side of the market. Additionally, the firm's desired profit is a crucial component, affected by profit margins, that determines the final price of pizzas.
Thus, the decrease in the price of pizzas could be a strategic choice by firms to offer competitive pricing in response to improved production efficiency, without necessarily reducing their profit margins.