Worked Examples · Example 2
Q.
The price (, in ₹) of a commodity and the quantity demanded (, in units) over 5 weeks are given below. Find Karl Pearson's coefficient of correlation.
| Week | 1 | 2 | 3 | 4 | 5 |
|---|---|---|---|---|---|
| Price () | 10 | 20 | 30 | 40 | 50 |
| Quantity demanded () | 40 | 35 | 25 | 20 | 10 |
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✓ Free question
Step 1 — Find the means. . .
Step 2 — Tabulate deviations, products and squares.
| 10 | 40 | −20 | 14 | −280 | 400 | 196 |
| 20 | 35 | −10 | 9 | −90 | 100 | 81 |
| 30 | 25 | 0 | −1 | 0 | 0 | 1 |
| 40 | 20 | 10 | −6 | −60 | 100 | 36 |
| 50 | 10 | 20 | −16 | −320 | 400 | 256 |
| Total | −750 | 1000 | 570 |
Step 3 — Apply the formula.
Independent check. Every single week shows price rising alongside demand falling — a perfectly consistent pattern — so an this close to is exactly what should be expected; a value near or positive would signal an arithmetic error. Also, re-summing the cross-product column in reverse order, — matches, confirming the total.
✓Final answer
, a very strong negative correlation, matching the visibly consistent downward pattern of the data.
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