Nine sales cluster between $240,000 and $260,000, but one estate sale closed at $95,000. Which measure of central tendency best describes this market?
Correct Answer
D) The median, since one extreme cannot skew it
Why this is correct: The original explanation notes that a single extreme value (the $95,000 estate sale) pulls the mean down, while the median, being the middle value in an ordered list, is unaffected by outliers. With nine sales clustered between $240k-$260k, the median will lie within that cluster, representing the typical transaction. Why the other choices are wrong: The mean, since it uses every observation would be skewed downward by the outlier, misrepresenting the typical price. The range, since it shows both extremes describes spread, not central tendency. The mode, since prices repeat frequently might work if there is a frequent repeating price, but the median is explicitly robust against the single extreme. Exam tip: When data has a significant outlier, the median is usually the better measure of central tendency.
Why This Is the Correct Answer
Why this is correct: The original explanation notes that a single extreme value (the $95,000 estate sale) pulls the mean down, while the median, being the middle value in an ordered list, is unaffected by outliers. With nine sales clustered between $240k-$260k, the median will lie within that cluster, representing the typical transaction. Why the other choices are wrong: The mean, since it uses every observation would be skewed downward by the outlier, misrepresenting the typical price. The range, since it shows both extremes describes spread, not central tendency. The mode, since prices repeat frequently might work if there is a frequent repeating price, but the median is explicitly robust against the single extreme. Exam tip: When data has a significant outlier, the median is usually the better measure of central tendency.
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