The Polar Bear Ice Cream Company has a monthly revenue of $10,000 for its Cookies and Cream ice cream. Its competitor, the Royal Ice cream Company sells a similar flavor of ice cream for which it realizes a monthly revenue of $7,000.

Each month some customers change brands. however the total amount of money that is available to spend on Cookies and Cream ice cream is always a constant $17,000. Suppose that 80% of the customers stay with their current brand and 20% switch. What will the distribution of income be after 6 months? Predict the long term distribution of income for the two companies.

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Sample of correct solutions for this problem will be posted after July 18, 1997.

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Judy Ann Brown

14 July, 1997