A regional high-end specialty supermarket is considering opening a new store and is curious about the relationship between demographic data and store sales for its existing stores. For example, are store sales related to the population in the town where the store is located? Data for 10 stores produced this scatterplot and regression:

Predictor                 Coef
Intercept.................2.924
Population............0.0703
s = 1.842
RSq = 56.9%

a) Do you think a linear model is appropriate here? Explain.

b) What is the correlation between store Sales and town Population?

c) Explain the meaning of R² in this context.

Transcribed Image Text:

11 10 20 40 60 80 100 Population ($ thousands) Sales ($ million) O76 54 321 O