"Muggles" refers to industries that

**From passage:** "Arena industries are wizard-ish; we found that there's a set of industries that play by very different set of economic rules and get very different results, while the rest, the muggles (even though they run the world, finance the world, and energize the world), play by a more traditional set of economic rules." This is a direct definition question! Chris says wizards play by different economic rules -> muggles play by traditional economic rules -> that's our answer right there! The confusion happens because students remember wizards = good, so they think muggles = bad. But the passage says muggles "run the world, finance the world, and energize the world" - they're important , just different! 🔴 Option 1 -> wizard-characteristic -> "rapid and frequent changes" describes wizards (high shuffle rate), not muggles 🔴 Option 2 -> wizard-characteristic -> "high market cap growth" is what wizard industries have (45% of growth), not muggles 🟢 Option 3 is correct -> matches perfectly: "play by a more traditional set of economic rules" (from passage) = "operate under traditional economic principles" 🔴 Option 4 -> wizard-characteristic -> wizards are "two times more R&D intensive" = focused on innovation, not muggles