A Major Shortcoming of a Correlational Study Is That Even

question 177

Essay

A major shortcoming of a correlational study is that even when a correlation between two variables is statistically significant, one cannot infer causation. For example, a significant correlation exists between life stress and depression, yet one cannot say for sure that life stress causes depression. Given this major shortcoming, what are some specific reasons one might still wish to conduct a correlational study, as opposed to an experimental study (from which one might infer a cause-and-effect relationship)?

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Definitions:

Perfectly Competitive

A market structure characterized by a large number of small firms, identical products, and ease of entry and exit.

MC Curve

The graph that shows the relationship between the marginal cost of producing each additional unit and the quantity produced.

Total Profit

The difference between total revenue and total costs, representing the overall earning performance of a business.

Perfectly Competitive

A market structure characterized by a large number of small firms, a homogenous product, free entry and exit, and perfect information, leading to firms being price takers.