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Suppose the entire cola industry produces only two colas viz., Pepsi and Coke. Given that a person last purchased Pepsi, there is 90% that his next purchase will be Pepsi. Given that a person last purchased Coke, there is an 80% that the next purchase will be Coke.
i. If a person is currently a Coke purchaser, what is the probability that two purchases from now he will purchase Pepsi ?
ii. If a person is currently a Pepsi purchaser, what is the probability that from three purchases from now he will purchase Pepsi ?
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