Business/Economics: Below is the scatterplot, regression line, and corresponding

Question

Business/Economics: Below is the scatterplot, regression line, and corresponding statistics for price (x) -vs- number sold (y) data Price -vs- Demand: x = Price per item (in dollars) y = Demand (number of items sold) Demand Data 1400 1200 1000 correlation coefficient: regression equation: y =-98x + 1479 sample size: n-19 200 sample means: x-$6.50 y=843.9 12 Price per Item (in dollars) Answer the following questions regarding the relationship between price (x) and demand (y). (a) Is there a significant linear correlation between these variables? Yes No ge with one decimal place. by the linear re lation to price? Enter your answer as a percenta (b) What percentage of the variation in demand can be explained was set at $8.00? Round your answer to the nearest whole number (c) How many items would you expect to sell if the price items

Explanation / Answer

Part a

There is a significant linear correlation between these variables because the correlation coefficient is given as -0.944, which indicate a very strong negative linear relationship or association exists between the given two variables.

Answer: Yes

Part b

Here, we have to find the coefficient of determination or the value of R square which is given as below:

Coefficient of determination = r^2 = (-0.944)^2 = 0.891136

This means about 89.1% of the variation in the dependent variable is explained by independent variable.

Answer: 89.1%

Part c

We are given

X = Price = 8

Regression equation is given as below:

Y = -98*X + 1479

Y = -98*8 + 1479

Y = 695

Answer: 695 items

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