Managerial economics help please! Which of the following is the interpretation o

Question

Managerial economics help please!

Which of the following is the interpretation of the coefficient of determination?

A. 43.31% of the variability in the quantity produced can be explained by its log linear dependence upon the labor and capital; thus, the fit of the equation is very good.

B. 67.54% of the sample variability in the quantity produced can be explained by its log linear dependence upon the labor and capital; thus, the fit of the equation is somewhat good.

C. 45.62% of the sample variability in the quantity produced can be explained by its log linear dependence upon the labor and capital; thus, the fit of the equation is NOT great, but does have some explanatory power.

D. There is 67.54% chance that the quantity produced can be explained by its dependence upon the labor and capital; thus, the linear model should be used.

E. 45.62% of the variability in the quantity produced can be explained by its linear dependence upon the labor and capital; thus, the fit of the equation is very poor.

Explanation / Answer

using the definition of the coefficient of determination (denoted by R2) is a key output of regression analysis. It is interpreted as the proportion of the variance in the dependent variable that is predictable from the independent variable.

The answer to your question is option C

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