Question
Suppose that in a different city Finns opens a new studio, and this studio offers a Lifetime package. The Lifetime package means that once a
Suppose that in a different city Finns opens a new studio, and this studio offers a Lifetime package. The Lifetime package means that once a family buys this package, they are permanently in this state. Market research shows that the only families that will buy the Lifetime package are ones that bought the deluxe package the year before, but only 3% of them. Research also shows that this is a tougher market than the first one. If a family did not purchase a portrait package last year, then there is a 7% chance that they will buy a regular package, and a 2% chance that they will buy a deluxe package. If a family purchased a regular package last year, then there is a 50% chance that they will not purchase a package this year, but a 12% chance that they will buy a deluxe package. If a family purchased a deluxe package last year, there is a 25% chance that they will not buy a package this year, a 32% chance that they will buy a standard package, and we already mentioned that there is a 3% chance that they will buy the Lifetime package. (a) What is the steady state solution? Is this reasonable for thisscenario? Explain using complete sentence(s).
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