Question

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?
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

Answer 1

median because there is an outlier (1 million and stuff) that is about 10 times as much as everything else

Answer 2

The last option is the correct answer.

Explanation:

Based on the data, the median should be used to make an inference about the profits earned by these companies. There is an outlier (company D) that will affect the mean.

So, last option - Median, because there is an outlier that affects the mean - is correct.