Can movie rental revenue be predicted?
A movie studio wishes to determine the relationship between the revenue from rental of comedies on DVD and videotape and the revenue generated from the theatrical release of such movies. The studio has the following bi-variate data from a sample of fifteen comedies released over the past five years. These data give the revenue X from theatrical release (in millions of dollars) and the revenue Y from DVD and videotape rentals (in millions of dollars) for each of the fifteen movies. Also shown are the scatter plot and the least squares regression line for the data. The equation for this line is Yhat = 3.44 + .15X
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The solution provides predictions from the least squares regression line. Can movie rental revenues be predicted is determined.