Correlation and RegressionMCQMTP Apr 21Question 3626 of 188
All Questions

Price and Demand are the example of

Options

ANo correlation
BPositive correlation
CNegative correlation
DNone of these
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Correct Answer

Option cNegative correlation

All Options:

  • ANo correlation
  • BPositive correlation
  • CNegative correlation
  • DNone of these

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Detailed Solution & Explanation

**Price-Demand Relationship (Law of Demand):** According to the **Law of Demand** in economics: - When **Price increases** uparrow\displaystyle \\uparrow, **Demand decreases** downarrow\displaystyle \\downarrow - When **Price decreases** downarrow\displaystyle \\downarrow, **Demand increases** uparrow\displaystyle \\uparrow Since Price and Demand move in **opposite directions**, there is a **negative correlation** between them. This is one of the classic examples of negative correlation: - Other examples: Supply and Price (positive), Height and Weight (positive), Income and Number of children (negative) rtextPrice,Demand<0r_{\\text{Price, Demand}} < 0 Hence, **Option C** is the correct answer.

About This Chapter: Correlation and Regression

Paper

Paper 3: Quantitative Aptitude

Weightage

4-6 Marks

Key Topics

Correlation Coefficient, Regression Equations

This chapter covers Correlation Coefficient, Regression Equations and is part of Paper 3: Quantitative Aptitude in the CA Foundation exam.

View Official ICAI Syllabus

Exam Strategy Tip

This topic carries 4-6 Marks weightage. Focus on understanding core concepts rather than memorizing.

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