A publisher of an industry newsletter wants to forecast the number of firms that are likely to subscribe in future years. Total subscriptions in a given year consist of renewals by current subscribers (O) and new subscriptions (N.): Q = 0, + N The publisher's best estimate of the number of new subscribers is N, -1.25(Q-1-Q1-2). In words, the larger the recent increase in subscriptions, the more attractive is the newsletter to new subscribers. Finally, 95 percent of current customers renew their subscriptions. Use the given information to write down a reduced-form equation for Qas it depends on Q-1 and Q-2-1

b. The number of subscribers increased from 100 last year to 120 this year. Provide subscription forecasts for the next seven years. Explain the predicted pattern of sales.