Table 14-1 The Following Data Consists of a Matrix of Transition Probabilities

question 90

Multiple Choice

Table 14-1
The following data consists of a matrix of transition probabilities (P) of three competing companies, and the initial market share π(0) .Assume that each state represents a company (Company 1, Company 2, Company 3, respectively) and the transition probabilities represent changes from one month to the next.
P = π(0) = (0.3, 0.6, 0.1)
-Using the data in Table 14-1, determine Company 2's estimated market share in the next period.

• A)0.26
• B)0.27
• C)0.28
• D)0.29

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Definitions:

Absolute Advantage

The ability of an entity to produce a good or service more efficiently than its competitors with the same amount of resources.

Resources

Assets, materials, and inputs used to produce goods and services, including time, labor, capital, and natural resources.

Production

The process of creating, growing, manufacturing, or improving goods and services.

Production Possibility Curve

A graphical representation showing the maximum combination of goods and services that can be produced with a given set of resources and technology.