Correlation and Regression Are Related Statistical Functions

question 4

Multiple Choice

Correlation and regression are related statistical functions. Which option best describes this relationship?

• A) Regression is a measure of how well correlation explains the relationship between two variables
• B) The correlation coefficient always lies on the regression line
• C) Correlation can indicate how well the regression line 'fits' the data
• D) The regression line can be calculated using values for the mean and the correlation coefficient

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Definitions:

Marginal Revenue

The increment in revenue realized from the sale of an additional unit of a product.

Market Price

The current price at which a good or service can be bought or sold in an open and competitive market.

Purely Competitive Market

A market structure characterized by a large number of buyers and sellers, homogeneous products, and free entry and exit, leading to price taking behavior.

Purely Competitive Firm

A company operating in a market where there are many buyers and sellers offering homogeneous products, leading to the inability to influence market price.