Complete question :
A candy bar manufacturer is interested in trying to estimate how sales are influenced by the price of their product. To do this, the company randomly chooses 6 small cities and offers the candy bar at different prices. Using candy bar sales as the dependent variable, the company will conduct a simple linear regression on the data below:
City - - - - - - - Price ($) -- - Sales
River City - - 1.30 - - - - - - 100
Hudson - - - 1.60 - - - - - 90
Ellsworth - - - 1.80 - - - - - 90
Prescott - - - - 2.00 - - - - 40
Rock Elm - - 2.40 - - 38
Stillwater - - 2.90 - - 32
Answer:
78.39%
Explanation:
Given the data :
Price (X) :
1.30
1.60
1.80
2.00
2.40
2.90
Sales (y) :
100
90
90
40
38
32
The percentage of the total variation in candy bar sales explained by the regression model can be obtained from the value of the Coefficient of determination(R^2) of the regression model. The Coefficient of determination is a value which ranges between 0 - 1 and gives the proportion of variation in the dependent variable which can be explained by the dependent variable.
R^2 value is obtained by getting the squared value of R(correlation Coefficient).
The R value obtained using the online R value calculator on the data is : - 0.8854
Hence, R^2 = (-0.8854)^2 = 0.7839
Expressing 0.7839 as a percentage ;
0.7839 × 100 = 78.39%