Note that 1 - .05 = .95, 1 - .15 = .85, and 1 - .15 - .15 = .7 Thus, we have the transition matrix .95 .05 .00 .15 .70 .15 .00 .15 .85 Thus, we solve for the eigenvector with eigenvalue 1 (This is the steady state solution.) Let x = 1 Then, .95 + .15y = 1 .05 + .7y + .15z = y Solving, .15y = 1 - .95 .15z - .3y = -.05 Then, .15y = .05 y = .05/.15 = 1/3 Then, .15z - .3(1/3) = -.05 .15z = -.05 + .1 .15z = .05 z = .05/.15 = 1/3 Thus, x = 1, y = 1/3, z = 1/3 is the eigenvector Yet, as x + y + z = 1, then (x, y, z) = c(1, 1/3, 1/3) and (1+1/3+1/3)c = 1 5/3c = 1 c = 3/5 Then, (x, y, z) = 3/5(1, 1/3, 1/3) = (3/5, 1/5, 1/5) or (.6, .2, .2) = (60%, 20%, 20%) Poor = 60% Satisfactory = 20% Preferred = 20% Solution Note that 1 - .05 = .95, 1 - .15 = .85, and 1 - .15 - .15 = .7 Thus, we have the transition matrix .95 .05 .00 .15 .70 .15 .00 .15 .85 Thus, we solve for the eigenvector with eigenvalue 1 (This is the steady state solution.) Let x = 1 Then, .95 + .15y = 1 .05 + .7y + .15z = y Solving, .15y = 1 - .95 .15z - .3y = -.05 Then, .15y = .05 y = .05/.15 = 1/3 Then, .15z - .3(1/3) = -.05 .15z = -.05 + .1 .15z = .05 z = .05/.15 = 1/3 Thus, x = 1, y = 1/3, z = 1/3 is the eigenvector Yet, as x + y + z = 1, then (x, y, z) = c(1, 1/3, 1/3) and (1+1/3+1/3)c = 1 5/3c = 1 c = 3/5 Then, (x, y, z) = 3/5(1, 1/3, 1/3) = (3/5, 1/5, 1/5) or (.6, .2, .2) = (60%, 20%, 20%) Poor = 60% Satisfactory = 20% Preferred = 20%.