If we want to use Markov analysis to study market shares for competitive businesses,
A)it is an inappropriate study.
B)simply replace the probabilities with market shares.
C)it can only accommodate one new business each period.
D)only constant changes in the matrix of transition probabilities can be handled in the simple model.
E)None of the above

Question

Quizplus · Accepted Answer

Markov analysis can be used to study market shares for competitive businesses by replacing the probabilities with market shares. The transition probabilities in the Markov matrix can be replaced with the current market shares of the businesses. This will enable us to study the dynamics of market shares over time and the impact of changes in market conditions on the market shares.

If We Want to Use Markov Analysis to Study Market