Which Statement About Correlation Is True?
I $r^{2}=0.95$ , the Response Variable Increases as the Explanatory Variable Increases

question 126

Multiple Choice

Which statement about correlation is true?
I. Regression based on data that are summary statistics tends to result in a higher correlation.
II. If $r^{2}=0.95$ , the response variable increases as the explanatory variable increases.
III. An outlier always decreases the correlation.

• A) I only
• B) II only
• C) none
• D) III only
• E) I, II, and III

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Definitions:

Price Discrimination

The strategy of selling the same product at different prices to different groups of consumers, based on their willingness to pay.

Economic Profit

The total revenue of a firm minus its explicit and implicit costs, essentially measuring the excess beyond the break-even point.

Price Discrimination

Price Discrimination occurs when a seller charges different prices for the same product or service to different customers, based on factors other than the cost of production.

Individual Demand

The quantity of a good or service that a single consumer is willing and able to purchase at various prices.