Question

The correlation between the price of a certain food item and the number of sales of the item in a random sample of stores was ̶ 0.71. Therefore about ____ % of the variation in sales among stores is accounted for by the linear relationship between price and sales:

Answer 1

Given that, the correlation between the price of a certain food item and the number of sales of the item in a random sample of stores was -0.71. That is, correlation coefficient = r = -0.71

We want to find, the coefficient of determination (R^{​​​​​​2})

=> Coefficient of determination = 0.5041 (OR 50.41%)

Interpretation of this coefficient of determination is:

About 50.41% of the variation in sales among stores is accounted for by the linear relationship between price and sales.

Answer : 50.41%