Step 1 :The problem provides a transition matrix representing customers upgrading their cell phones. Each customer upgrades to a new cell phone every two years. The transition matrix is given as \(\left[\begin{array}{rr} 0.4 & 0.6 \ 0.25 & 0.75 \end{array}\right]\), where the first row represents the current state (owning Phone A) and the first column represents the next state (selecting Phone A).
Step 2 :For part (a), the probability that a customer who currently owns Phone A selects Phone A with the first upgrade is directly given by the first entry of the matrix, which is 0.4.
Step 3 :For part (b), the probability that a customer who currently owns Phone A selects Phone A with the second upgrade can be found by squaring the transition matrix and then looking at the entry in the first row and first column. The result is 0.31.
Step 4 :For part (c), the probability that a customer who currently owns Phone A selects Phone A with the third upgrade can be found by cubing the transition matrix and then looking at the entry in the first row and first column. The result is 0.2965.
Step 5 :Final Answer: The probability that a customer who currently owns Phone A will select Phone A for the third upgrade is \(\boxed{0.2965}\).