Numerical solutions of the steady transonic small-disturbance (TSD) potential equation are computed using the conservative Murman−Cole scheme. Multiple solutions are discovered and mapped out for the Mach number range at zero angle of attack and the angle of attack range at Mach number 0.85 for the NACA 0012 airfoil. We present a linear stability analysis method by directly assembling and evaluating the Jacobian matrix of the nonlinear finite-difference equation of the TSD equation. The stability of all the discovered multiple solutions are then determined by the proposed eigen analysis. The relation of stability to convergence of the iterative method for solving the TSD equation is discussed. Computations and the stability analysis demonstrate the possibility of eliminating the multiple solutions and stabilizing the remaining unique solution by adding a sufficiently long splitter plate downstream the airfoil trailing edge. Finally, instability of the solution of the TSD equation is shown to be closely connected to the onset of transonic buffet by comparing with experimental data.