37 Kurt’s Hardware Store advertises and sells snow blowers each season. The following table provides the annual demand, level of advertising, in dollars, and snowfall, in inches, for the past eight years:

YEAR DEMAND

(units) ADVERTISING SNOWFALL

(inches)

1 41 $4,000 82 2 38 $3,500 64 3 26 $1,800 52 4 43 $2,800 60 5 33 $3,000 58 6 30 $2,400 50 7 34 $2,600 60 8 37 $2,200 53

(a) Develop a simple regression model to predict the demand for snow blowers based on the number of advertising dollars spent.

(b) What percentage of the demand variation is explained by the level of advertising?

(c) Next year’s advertising budget is $2,600. What is the predicted demand for snow blowers?