5. (a) The purchase patterns of two brands of toothpaste can be expressed as a Markov process...
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5.
(a) The purchase patterns of two brands of toothpaste can be expressed as a Markov process with the following probabilities:
(i) Which brand appears to have most loyal customers? Explain.
(ii) What are the projected market shares for the two brands?
(b) Suppose that in part
(a) a new toothpaste brand enters the market such that the following transition probabilities exist:
What are the new long run market shares? Which brand will suffer from the introduction of the new brand of toothpaste?
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