Final answer:
To fix the dangling modifier in the sentence, it should specify the subject who did the reading, e.g., 'After I read the book the movie was based on, I noticed several key plot elements were missing.'
Step-by-step explanation:
The sentence 'After reading the book it was based on, several key plot elements were missing from the movie.' contains a dangling modifier because the modifier 'after reading the book it was based on' is not clearly attached to the doer of the reading.
To correct this, the sentence needs to specify who did the reading. A possible revision could be: 'After I read the book the movie was based on, I noticed several key plot elements were missing.' This revision clearly attaches the action of reading to the subject 'I' and resolves the issue of the dangling modifier.