Module 8 Lesson 3: Applications of Statistics
The profits earned in a year by some companies in a city are shown below:
Company Profit
A $160,000
B $140,000
C $130,000
D $1,120,000
E $150,000
Based on the data, should the mean or the median be used to make an inference about the profits earned by these companies?
(1 point)
Group of answer choices
Mean, because it is in the center of the data
Median, because it is in the center of the data
Mean, because there are no outliers that affect the mean
Median, because there is an outlier that affects the mean
Median, because there is an outlier that affects the mean
The presence of the outlier profit value of $1,120,000 for company D skews the mean significantly higher than the rest of the profits. In this case, it would be more appropriate to use the median as it is not affected by outliers and provides a better representation of the central tendency of the data.