If the level of final demand for the output of the two industries

is 5,000 for P and 4,000 for Q, at what level of output should

the two industries operate?
1.6 TRANSITION PROBABILITY MATRICES
These are matrices in which the individual elements are the
probabilities of transition from one state to another of an event.
The probabilities of the various changes applied to the initial state
by matrix multiplication gives a forecast of the succeeding state.
The following examples illustrate the method.
Example 48
Two products A and B currently share the market with
shares 60% and 40 % each respectively. Each week some
brand switching takes place. Of those who bought A the
previous week, 70% buy it again whereas 30% switch over
to B. Of those who bought B the previous week, 80% buy it
again whereas 20% switch over to A. Find their shares after
one week and after two weeks. If the price war continues,
when is the equilibrium reached?
Solution :
Transition Probability matrix
A B
T = A 0.7 0.3
B  0.2 0.8
Shares after one week
A B
A B A B
A 0.7 0.3
(0.6 0.4)   = ( 0.5 0.5)
B  0.2 0.8

A = 50%, B = 50%
Shares after two weeks
A B
A B A B
A 0.7 0.3
(0.5 0.5)   = (0.45 0. 55)
B  0.2 0.8
A = 45%, B = 55%
60
 Equilibrium
At equilibrium we must have
(A B) T = (A B) where A + B =1
 0.7 0.3
⇒ (A B)  0.2 0.8 = (A B)
 
⇒ 0.7 A + 0.2 B =A
⇒ 0.7 A + 0.2 (1-A) =A
Simplifying, we get A = 0.4
∴ Equilibrium is reached when A’s share is 40% and B’s
share is 60%
Example 49
A new transit system has just gone into operation in a
city. Of those who use the transit system this year, 10% will
switch over to using their own car next year and 90% will
continue to use the transit system. Of those who use their
cars this year, 80% will continue to use their cars next year
and 20% will switch over to the transit system. Suppose the
population of the city remains constant and that 50% of the
commuters use the transit system and 50% of the commuters
use their own car this year,
(i) what percent of commuters will be using the transit
system after one year?
(ii) what percent of commuters will be using the transit
system in the long run?
Solution :
Transition Probability Matrix
S C
S  0.9 0.1
T =  
C 0.2 0.8
Percentage after one year
S C
S C S 0.9 0.1 A B
 
(0.5 0.5)   = (0.55 0. 45)
C 0.2 0.8
61
 S = 55% , C = 45%
Equilibrium will be reached in the long run.
At equilibrium we must have
(S C) T = (S C) where S + C = 1
 0.9 0.1 
⇒ (S C)   = (S C)
 0.2 0.8 
⇒ 0.9S + 0.2C = S
⇒ 0.9S + 0.2(1-S) = S
Simplifying, we get S = 0.67
∴67% of the commuters will be using the transit system in
the long run.
EXERCISE 1.6
1) Two products P and Q share the market currently with shares
70% and 30% each respectively. Each week some brand
switching takes place. Of those who bought P the previous
week, 80% buy it again whereas 20% switch over to Q. Of
those who bought Q the previous week, 40% buy it again
whereas 60% switch over to P. Find their shares after two
weeks. If the price war continues, when is the equilibrium
reached?
2) The subscription department of a magazine sends out a letter
to a large mailing list inviting subscriptions for the magazine.
Some of the people receiving this letter already subscribe to
the magazine while others do not. From this mailing list, 60%
of those who already subscribe will subscribe again while 25%
of those who do not now subscribe will subscribe. On the last
letter it was found that 40% of those receiving it ordered a
subscription. What percent of those receiving the current letter
can be expected to order a subscription?
3) Two newspapers A and B are published in a city. Their present
market shares are 15% for A and 85% for B. Of those who
bought A the previous year, 65% continue to buy it again while
35% switch over to B. Of those who bought B the previous
year, 55% buy it again and 45% switch over to A. Find their
market shares after two years.
62
 EXERCISE 1.7
Choose the correct answer
1) If the minor of a 23 equals the cofactor of a 23 in |a i j| then the
minor of a 23 is
(a) 1 (b) 2 (c) 0 (d) 3
0 2
2) The Adjoint of   is
2 0 
2 0  0 − 2 1 0  0 2
(a)   (b)   (c)   (d)  
0 2   − 2 0  0 1  2 0 
1 0 0
 
3) The Adjoint of 0 1 0 is
0 1 
 0
 −1 0 0   13 0 0
   
(b)  0 0
1
(a)  0 −1 0  3
 0 0 −1 0 1
   0 3
1 0 0 2 0 0
   
(c) 0 1 0 (d) 0 2 0
0 1  0 2 
 0  0

4) If AB = BA = |A | I then the matrix B is

(a) the inverse of A (b) the transpose of A
(c) the Adjoint of A (d) 2A
5) If A is a square matrix of order 3 then |AdjA| is
(a) |A|2 (b) |A| (c) |A|3 (d) |A|4
6) If |A| = 0 then |AdjA| is
(a) 0 (b) 1 (c) −1 (d) +1
0 2
7) The inverse of   is
2 0 
0 1
0 1

(a)   (b)  1 
2 2

2 0  2 0 
0 − 12  2 0
(c)  1  (d)  
2 1  0 2 

63
  0.8 0.6
8) If A =   then A−1 is
 −0.6 0.8
 −0.8 0.6  0.8 − 0.6  0.8 0.6   0.2 0.4
(a)   (b)  0.6 0.8  (c)  0.6 0.8  (d)  −0.4 0.2
 −0.6 0.8      
9) For what value of k the matrix A,
2 k 
where A =   has no inverse?
3 5
(a) 3 (b) 10 (c) 3 (d) 10
10 3
2 3 1
 
10) If A =  3 4 1  then A−1A is
3 7 2 

(a) 0 (b) A (c) I (d) A2.
11) The rank of an n x n matrix each of whose elements is 1 is
(a) 1 (b) 2 (c) n (d) n2
12) The rank of an n x n matrix each of whose elements is 2 is
(a) 1 (b) 2 (c) n (d) n2
13) The rank of a zero matrix is
(a) 0 (b) 1 (c) −1 (d) ∞
14) The rank of a non singular matrix of order n x n is
(a) n (b) n2 (c) 0 (d) 1
15) A system of linear homogeneous equations has at least
(a) one solution (b) two solutions
(c) three solutions (d) four solutions
16) The equations AX = B can be solved by Cramer’s rule only
when
(a) |A| = 0 (b) |A| ≠ 0 (c) A = B (d) A ≠ B
x y
a 0 1
17) The inverse of the relation   is
b 1 0 
a b x y a b x y
x 0 1 a  0 − 1 x 0 0 a0 0
(a)   (b)   (c)   (d)  
y  1 0  b  − 1 0  y 1 1  b  0 0 

64
 a b
a0 1
18) The relation R =   is
b  1 0 
(a) Reflexive (b) Symmetric
(c) Transititve (d) Reflexive and symmetric
19) The number of Hawkins - Simon conditions for the viability
of an input - output model is
(a) 1 (b) 3 (c) 4 (d) 2
A B
A 0.7 0.3
20) If T =   is a transition probability matrix, then the
B  x 0.8
value of x is
(a) 0.3 (b) 0.2 (c) 0.3 (d) 0.7

65