In Exercise we found a model for the gross revenue from U.S. movie theatres for 106 recent movies that were rated either R or PG-13. A plot of residuals against predicted revenue shows:

A histogram of the y variable, US Gross shows:

a) What assumptions and/or conditions are violated by this model?
b) What would you recommend doing next to help improve the model?
c) Try a re-expression of US Gross by logarithms and refit the model. Examine the residual plot and comment briefly.

Transcribed Image Text:

200 100 % -100 200 50 100 150 200 250 Predicted Values o 50 40 5 30 20 10 100 200 US Gross 300 400