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State Transition Matrix Application
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A city classifies neighborhoods as Developing, Stable, or Declining based on property values. Each year, Developing areas have a 75% chance of remaining Developing, 20% chance of becoming Stable, and 5% chance of Declining. Stable areas have a 10% chance of becoming Developing, 80% chance of remaining Stable, and 10% chance of Declining. Declining areas have a 5% chance of becoming Developing, 15% chance of becoming Stable, and 80% chance of remaining Declining. If the city currently has 50 Developing, 100 Stable, and 30 Declining neighborhoods, how many Stable neighborhoods will there be after 2 years?

A

97

B

95

C

100

D

91

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