Question: Consider the purchasing patterns shown in the table below, involving different computer components. Which of the components does the consumer actually end up buying most

Consider the purchasing patterns shown in the table below, involving different computer components. Which of the components does the consumer actually end up buying most frequently in the long run?

Component 1Component 2Component 3
Component 130%30%40%
Component 230%45%25%
Component 350%40%10%


b) Find the probability that the consumer purchases Component 1first, tries it again or some other product, and then purchases Component 1 the next time.


c) Create the transition matrix C using the chart showing the purchases, find C², and find the probability that a consumer starting with Component 1 would return to it in two more purchases. Compare and discuss in details your solutions for question b) and c).

d) Find C3, C4, C5 and C6, each with 6 decimal places. Write down the probabilities of buying a particular component at the fifth purchase time after the initial purchase with 3 decimal places. Discuss in details your observations.

e) Which component will the consumer buy? Explain in details your conclusions.

Step by Step Solution

3.44 Rating (154 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

let component 1 be c... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!