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Worked Examples · Example 2
Q.

The price (xx, in ₹) of a commodity and the quantity demanded (yy, in units) over 5 weeks are given below. Find Karl Pearson's coefficient of correlation.

Week12345
Price (xx)1020304050
Quantity demanded (yy)4035252010
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✓ Free question

Step 1 — Find the means. xˉ=10+20+30+40+505=30\bar x = \dfrac{10+20+30+40+50}{5}=30. yˉ=40+35+25+20+105=26\bar y = \dfrac{40+35+25+20+10}{5}=26.

Step 2 — Tabulate deviations, products and squares.

xxyyx−xˉx-\bar xy−yˉy-\bar y(x−xˉ)(y−yˉ)(x-\bar x)(y-\bar y)(x−xˉ)2(x-\bar x)^2(y−yˉ)2(y-\bar y)^2
1040−2014−280400196
2035−109−9010081
30250−1001
402010−6−6010036
501020−16−320400256
Total−7501000570

Step 3 — Apply the formula.

r=−7501000570=−750570000≈−750754.98≈−0.993r = \dfrac{-750}{\sqrt{1000}\sqrt{570}} = \dfrac{-750}{\sqrt{570000}} \approx \dfrac{-750}{754.98} \approx -0.993

Independent check. Every single week shows price rising alongside demand falling — a perfectly consistent pattern — so an rr this close to −1-1 is exactly what should be expected; a value near 00 or positive would signal an arithmetic error. Also, re-summing the cross-product column in reverse order, (−320−60)+(0−90−280)=−380−370=−750(-320-60)+(0-90-280) = -380-370=-750 — matches, confirming the total.

✓Final answer

r≈−0.993r \approx -0.993, a very strong negative correlation, matching the visibly consistent downward pattern of the data.

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