Systems of Linear Equations & Matrices (Problem Set 2 – 8)

Problem Set 2 – 8
Text: E. K. Bowen, G. D. Prichett & J. C. Saber
Solutions: Muhammad Shamim

1. Lotus and Microsoft each have 50 percent of the market for a

certain software. Because of a promotion campaign, buyers are
switching between Lotus and Microsoft according to the following
transition matrix.

Lotus Microsoft
Lotus  0.6 0.4 
 
Microsoft  0.5 0.5 

(a) What do the numbers 0.6 and 0.4 mean?

(b) What will be the market shares after the first and second
transitions?
(c) What are the steady state market shares?

Solution: (a) 60% of customers who last purchased Lotus will purchase
Lotus again, and 40% will switch to Microsoft.

  0.6 0.4   0.6 0.4 

(b) Market shares = 0.5 0.5   
  0 . 5 0 . 5   0.5 0.5 
 0.6 0.4 
=  0 .3  0.25 0 . 2  0 .25  
 0.5 0.5 
 0.6 0.4 
=  0 .55 0.45   
 0.5 0.5 

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
= 0.33  0.225 0.22  0.225 
= 0.555 0.445 [Ans.]

(c) For any steady state vector (v), we know

 0.6 0.4 
v1 v 2    v1 v 2 
 0.5 0.5 
 0.6 v1  0.5v 2 0.4v1  0.5v 2   v1 v 2 

0.6 v1  0.5v 2  v1

0.4 v1  0.5v 2  v 2

 0.4 v1  0.5v 2  0

0.4v1  0.5v 2  0
Of course the ultimate system is
0.4v1  0.5v 2  0.......................(1)
v1  v 2  1.......................(2)

Solving (1) and (2), we get

(1) + (2)0.4  – 0.4v1 + 0.5v2 + 0.4v1 + 0.4v2 = 0.4
 0.9v2 = 0.4
 v2 = 0.4/0.9
 v2 = 4/9
(2)  v1 + v2 = 1
 v1 + 4/9 = 1
 v1 = 1 – 4/9
 v1 = 5/9

 The steady state vector = (v1, v2) = (5/9, 4/9) [Ans.]

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2. At a point in time, 95 percent of the population were spenders of

copper pennies and 5 percent were savers. Because of the increasing
value of pennies, only 30 percent of the spenders remain spenders,
and 10 percent of the savers remain spenders.
(a) What will be the (spender saver) state vector after one
transition?
(b) What is the steady state vector?
Solution:
 0.3 0.7 
(a) The state vector = 0.95 0.05 
 0.1 0.9 

= 0.285  0.005 0.665  0.045 
= 0.29 0.71 [Ans.]

(b) For any steady state vector (v), we know

 0.3 0.7 
v1 v 2    v1 v 2 
 0.1 0.9 
 0.3 v1  0.1v 2 0.7 v1  0.9v 2   v1 v 2 

0.3v1  0.1v 2  v1

0.7 v1  0.9 v 2  v 2

 0.7 v1  0.1v 2  0

0.7 v1  0.1v 2  0
Of course the ultimate system is
0.7 v1  0.1v 2  0.......................(1)
v1  v 2  1.......................(2)

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Solving (1) and (2), we get

(1) + (2)0.7  – 0.7v1 + 0.1v2 + 0.7v1 + 0.7v2 = 0.7

 0.8v2 = 0.7

 v2 = 0.7/0.8

 v2 = 7/8

(2)  v1 + v2 = 1

 v1 + 7/8 = 1

 v1 = 1 – 7/8

 v1 = 1/8

 The steady state vector = (v1, v2) = (1/8, 7/8) [Ans.]

3. At a point in time, 1 percent of the population use a drug and 99

percent do not. In a year, 1/10 of one percent of nonusers become
users, but all users remain users.
(a) What will be the percentages of users and nonusers after one
transition?
(b) What is the steady state?
Solution:
 0.01 0.99 
(a) The state vector = 0.01 0.99 
 0.011 0.989 

= 0.0001 0.01089 0.0099  0.97911 
= 0.01099 0.98901 [Ans.]

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(b) This is an absorbing chain. The steady state is 100% users. So the

 
state vector = 1 0 . [Ans.]

4. A recent survey showed that 60 percent of the population own

some kind of microcomputer and 40 percent do not. Market experts
predict that in a year 10 percent of the non-owners will become
owners, and 1/100 of one percent of the owners will become non-
owners.
(a) What are the predicted percentages of owners and non-
owners for next year?
(b) What is the predicted steady state?
Solution: (a) Same to Problem 3(a)


[The state vector = 0.63994 0.36006 (Ans.)]
(b) Same to Problem 2(b)

 
[The steady state vector = 0.9900 0.0100 (Ans.)]

5. Currently, it is known that 85 percent of the population own a

automobile and 15 percent do not. Based upon past experience, in a
year 1¼ percent of the non-owners will become owners, and 1/1000
of one percent of the owners will become non-owners.
(a) What are the expected percentages of owners and non-
owners for next year?
(b) What is the expected steady state?
Solution: (a) Same to Problem 3(a)

 
[The state vector = 0.8519 0.1481 (Ans.)]

(b) Same to Problem 2(b)


[The steady state vector = 0.99992 0.00008 (Ans.)] 

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6. Florida Power and Light researched homeowners’ preferences of
heating. It found that of the people who have oil heat, 60 percent stay
with oil heat, 30 percent change to gas heat, and the rest change to
electric heat. Of the homeowners with gas heat, 80 percent stay with
gas heat, 15 percent change to electric heat, and 5 percent change to
oil heat. Of the homeowners with electric heat, 75 percent stay with
electric heat and 25 percent change to gas heat. Currently, 45 percent
of the homes in Miami are heated by oil, 40 percent by gas, and 15
percent by electricity.

(a) What are the expected market shares next year?

(b) What is the predicted steady state?

Solution:
(a) The state vector
 0.60 0.30 0.10 
 
=
0.45 0. 40 0.15 0. 05 0. 80 0.15 
 0 0.25 0.75 


= .27  .02  0 .135  .32  .0375 .045  0.06  0.1125 
= .29 .4925 .2175 [Ans.]

(b) For any steady state vector (v), we know

 0.60 0.30 0.10 

 
v1 v2 v3  0.05 0.80 0.15   v1 v 2 v3 ....(1)
 0 0.25 0.75 

and v1 + v2 + v3 = 1 ………………(2)

Solving (1) and (2), we get

The steady state vector = (v1, v2, v3) = (0.0704, 0.5634, 0.3662) [Ans.]

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7. The mayor of San Francisco has obtained data on the people’s
tendencies for renting an apartment, buying a condominium, or
buying a home. Of the people who rent, 40 percent continue to rent,
25 percent move to a condominium, and the rest buy homes. Of the
people who own condominium, 60 percent stay in a condominium and
the rest buy homes. Of the people who own homes, 80 percent stay in
a home and the rest split evenly between rental property and a
condominium. Currently, 55 percent of the people in San Francisco
rent, 15 percent own a condominium, and 30 percent own a home.

(a) What percentage will rent year after next? Own a

condominium? Own a home?
(b) What are the long-run percentages?

Solution:
(a) The state vector
  0.40 0.25 0.35  0.40 0.25 0.35 
    
= 0.55 0.15 0.30 0 0.60 0.40  0 0.60 0.40 
  0.10 0.10 0.80  0.10 0.10 0.80 
    

 0.40 0.25 0.35 

 
=
0.25 0. 2575 0. 4925 0 0.60 0.40 
 0.10 0.10 0.80 
 

= 0.14925 0.26625 0.5845 [Ans.] 
(b) Same to previous steady state vector, the long-run percentages


= 0.10959 0.23288 0.65753 
= 10.959% 23.288% 65.753% [Ans.]

8. The undergraduate admissions office at Babson College analyzed

where children of Babson, Bentley College, and Bryant College alumni
apply. From the pool of children that apply to exactly one of the three
schools, research indicates that of the children of Babson alumni, 85
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percent apply to Babson, 10 percent apply to Bentley, and the rest
apply to Bryant. Of the children of Bentley alumni, 40 percent apply to
Bentley, 35 percent apply to Babson, and the rest apply to Bryant. Of
the children of Bryant alumni, 40 percent apply to Bryant, and the rest
split evenly between Babson and Bentley.
(a) What percentage of the grandchildren of each college’s alumni
will apply to that college?
(b) What percentage of the great-grandchildren of each college’s
alumni will apply to that college?

Solution: (a) We can arrange the given information under the following
vector matrix:

Babson Bentley Bryant

Babson  0.85 0.10 0.05 
 
Bentley  0.35 0.40 0.25 
Bryant
 0.30 0.30 0.40 
 

So the percentage of the grandchildren for Babson college

 0.85 
 
= 0.85 0.10 0.05 0.35 
 0.30 
 
= 0.7225  0.035  0.015
= 0.7725
= 77.25% [Ans.]

So the percentage of the grandchildren for Bentley college

 0.10 
 
= 0.35 0.40 0.25 0.40 
 0.30 
 

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= 0.035  0.160  0.075

= 0.27
= 27% [Ans.]

So the percentage of the grandchildren for Bryant college

 0.05 
 
= 0. 30 0 .30 0 .40  0 .25 
 0.40 
 
= 0.015  0.075  0.160
= 0.25
= 25% [Ans.]

(b) The percentage of the great-grandchildren for three colleges


= 0.7319 0.2245 0.1915 
= 73.19% 22.45% 19.15 % [Ans.]
9. In the current presidential election year, the Democratic party
chairperson in Illinois has done an analysis of the voting preferences
of the state’s residents. The data indicate that every year 25 percent
of the registered Democrats change to Republican and 5 percent
change to independent. Also, 30 percent of the registered Republicans
change to Democrat and 10 percent change to independent, while 45
percent of the registered independents change to Democrat and 15
percent change to Republican.
(a) In the gubernatorial election two years from now, what
percentage of each party will remain unchanged?
(b) In the presidential election four years from now, what
percentage of each party will remain unchanged?
Solution: (a) We can arrange the given information under the following
vector matrix:

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Democrats Re publicans Independents
Democrats  0.70 0.25 0.05 
 
Re publicans  0.30 0.60 0.10 
Independents
 0.45 0.15 0.40 
 
So the percentage of the Democrats

 0.70 
 
= 0.70 0.25 0.05 0.30 
 0.45 
 
= 0.490  0.075  0.0225
= 0.5875
= 58.75% [Ans.]

So the percentage of the Republicans

 0.25 
 
= 0.30 0.60 0.01 0.60 
 0.15 
 
= 0.075  0.360  0.015

= 0.45
= 45% [Ans.]

So the percentage of the grandchildren for Bryant college

 0.05 
 
= 0.45 0.15 0.40  0.10 
 0.40 
 
= 0.0225  0.015  0.160
= 0.1975
= 19.75% [Ans.]
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 Systems of Linear Equations & Matrices (Problem Set 2 – 8)
(b) The percentage of three parties


= 0.53299 0.37733 0.11239 
= 53.299% 37.733% 11.239 % [Ans.]

10. Carry out the multiplication and interpret the result.

State State 1 2
1 2 1 1 0
a b  
2  0 1 

1 0
Solution: The new state vector = a b  
0 1
= a  0 0  b 

= a b  [Ans.]
Interpretation: The new state vector is the original (a b) because the
ones in the transition matrix mean that all in state #1 remain in #1 and
all in state #2 remain in #2.

11. The following chain is cyclical, meaning that it returns periodically

to the same state. Write the successive state vector until the initial
one, (0.6 0.3 0.1), reappears.
0 0 1
 
0.6 0.3 0.1 1 0 0 
0 1 0
 
Solution: The successive state vector must continue until we get the
initial one, (0.6 0.3 0.1), reappears.

So the first successive state vector

0 0 1
 
=
0. 6 0. 3 0. 1 1 0 0 
0 1 0
 
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= 0  0.3  0 0  0  0.1 0.6  0  0 
= 0.3 0.1 0.6  [Ans.]

So the second successive state vector

0 0 1
 
=
0. 3 0.1 0. 6  1 0 0 
 0 1 0
 
= 0  0.1  0 0  0  0.6 0.3  0  0 
= 0.1 0.6 0.3 [Ans.]

So the third successive state vector

0 0 1
 
=
0. 1 0. 6 0.3 1 0 0 
 0 1 0
 
= 0  0.6  0 0  0  0.3 0.1  0  0 
= 0.6 0.3 0.1 [Ans.]

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