R squared:(Coefficient of Determination)

R-squared is a statistical measure of how close the data are to the fitted regression line. It is also known
as the coefficient of determination, or the coefficient of multiple determination for multiple regression.
It helps to determine the predictive power of a regression model.

it is the percentage of the response variable variation that is explained by a linear model.

R-squared = Explained variation / Total variation

R-squared is always between 0 and 100%:(0 & 1)

0% indicates that the model explains none of the variability of the response data around its mean.

100% indicates that the model explains all the variability of the response data around its mean.

Generally ,R suared close to 1,Better is the model.

1st one showing about 40% variance while 2nd one accounts for 88% variance.

If R suared of a model is .7,how will u interpret it?

Ans: 70% of the variation of the dependent variable(say ,demand) can be explained by the independent
variables(say, price, income) of the regression model,30% is unexplained. This variation 30% depends
on external factors.