The Gunners' club-record signing sat out the high-profile affair at the Etihad Stadium on Sunday afternoon, which City went on to win 3-1 to move further clear at the top of the Premier League.
Arsenal ultimately struggled to create too many clear-cut chances, with Alexis Sanchez being given the nod through the middle, until Lacazette arrived in the 56th minute and temporarily changed the complexion of the game with a well-taken strike.
In a sly dig at his manager, Iwobi believes that Arsenal would have been better off had they used Lacazette from the beginning.
"We had an extra attacking player going forward but at the end of the day we set up very well to play against City and we were just unfortunate," he told the club's official website. "Maybe if he'd started on the wing it would have been different, but it is what it is."