Three sales at $200,000 and one at $280,000 are used to derive a typical price. What is the weighted mean if each sale counts equally?
Correct Answer
C) $220,000
Why this is correct: The original explanation shows the calculation: Total value = (3 * $200,000) + $280,000 = $880,000. Number of sales = 4. Weighted mean (equal weight per sale) = $880,000 / 4 = $220,000. The governing concept is that the mean is the sum of all values divided by the count. Why the other choices are wrong: $240,000 results from averaging only the two distinct prices ($200k and $280k), which incorrectly weights the single high sale equally with the group of three low sales. $200,000 is the mode, not the mean. $260,000 is not supported by the calculation. Exam tip: For a simple mean, sum all sale prices and divide by the number of sales. Don't average distinct price points unless each point represents an equal number of sales.
Why This Is the Correct Answer
Why this is correct: The original explanation shows the calculation: Total value = (3 * $200,000) + $280,000 = $880,000. Number of sales = 4. Weighted mean (equal weight per sale) = $880,000 / 4 = $220,000. The governing concept is that the mean is the sum of all values divided by the count. Why the other choices are wrong: $240,000 results from averaging only the two distinct prices ($200k and $280k), which incorrectly weights the single high sale equally with the group of three low sales. $200,000 is the mode, not the mean. $260,000 is not supported by the calculation. Exam tip: For a simple mean, sum all sale prices and divide by the number of sales. Don't average distinct price points unless each point represents an equal number of sales.
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