The sales manager of a large sporting goods store has recently started a national advertising cam

The sales manager of a large sporting goods store has recently started a national advertising cam

The sales manager of a large sporting goods store has recently started a national advertising campaign. He has kept a record of the monthly costs of the advertising and the monthly profits. These are shown here. The entries are in thousands of dollars.

a. Assuming a linear relationship exists, derive the least-squares regression line for predicting monthly profits from monthly advertising costs.

b. In August, the manager plans to spend $17,000 on advertising. Based on the data, how much profit should he expect that month?

(Round to the nearest $1000.)

c. Given the relationship shown by the paired scores, can you think of a reason why the manager doesn’t spend a lot more money on advertising?

 

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