Asecurity analyst specializing in the stocks of the motion picture industry wishes to examine the relation between the number of movie theater tickets sold in December and the annual level of earnings in the motion picture industry. Time-series data for the last 15 years are used to estimate the regression model
E a bN
where E is total earnings of the motion picture industry measured in dollars per year and N is the number of tickets sold in December. The regression output is as follows:
a. How well do movie ticket sales in December explain the level of earnings for the entire year?
b. On average, what effect does a 100,000-ticket increase in December sales have on the annual earnings in the movie industry?
c. Sales of movie tickets in December are expected to be approximately 950,000. According to this regression analysis, what do you expect earnings for the year to be?