Outliers Can Change Both the Direction and Strength of a Correlation

question 27

True/False

Outliers can change both the direction and strength of a correlation coefficient.

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Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price level, at a given time.

Relatively Elastic

Describes a situation where a small change in price leads to a larger change in the quantity demanded or supplied.

Decrease in Price

A reduction in the cost of a good or service, which can influence consumer demand and potentially market dynamics.

Price Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in its price, indicating its sensitivity.