• Structure: Refers to the characteristics of different types of markets. Think of this as the skeleton of the market; it's the foundation!
• Conduct: This is how firms act in the market. Imagine a big game of chess, and this is how the pieces move.
• Performance: How well the market achieves society's goals, like optimal output and low prices. Imagine getting the perfect score on your favorite game; that's great performance!

• Structure: Fast-food industry with many players.
• Conduct: Competitive pricing, advertising.
• Performance: Affordable meals, variety of choices.

Societal Goals

• Optimal Output: Producing just the right amount to meet society's needs.
• Lowest Possible Prices: Think of getting the newest smartphone without emptying your pockets!

 Innovation

• This is where firms come up with new ideas and products. It's like the latest updates in your favorite video game – new characters, new levels!

• It's like being the big player in your favorite game, having the ability to influence the rules.
• In business terms, it's a firm's ability to set or influence prices

Real-World Example: Amazon setting prices for many retail products.

• Even though we want firms to have little or no market power (it keeps prices low), some market power is usually needed for firms to innovate. It's like needing some control in the game to make it more exciting.
• Real-World Example: Google’s control in the search engine market allows them to innovate and come up with new features.