Question

The mean and median selling price of existing single-family homes sold in October 2005 were (in no particular order) $216,200 and $265,000. Which of the following most accurately explains which is the mean and which is the median and why?

Answer 1

Mhmm...the choices?

Answer 2

When calculating the mean selling price, the inclusion of the selling prices of a relatively small quantity of very expensive homes can significantly raise the average value. If this is the case, then ordering the data according to the values of the selling prices and taking the middle value (the median) will help give a clearer picture of selling prices, the reason being that the median $216,200 will be lower than the average $265,000.