2. A small city with 1,700 customers has three shoe stores S1, S2 and S3• Suppose that due to its location, there are no new customers added and the old ones also do not leave.

A survey of the number of customers visiting each store in the past year reveals the following:

Using the following information about gain/loss summary, obtain the transition probability matrix that defines the market structure for the three stores.

Transcribed Image Text:

Change during the year Store Customers as on Jan 1, Year 1 Customers as on Jan 1, Year 2 Gains Losses 55 55 55 S 800 250 350 700 400 275 200 475 500 150 125 525