Question

The mean and median selling prices of existing single-family homes sold in July 2012 were $263,200 and $224,200. Which of these numbers is the mean and which is the median? Explain how you know.

Answer 1

The mean is the sum of all numbers and then divided by how many numbers there is and the median is the numbers in order from least to greatest and the middle number of the set.

Answer 2

The correct answer is:

The mean is $263,200 and the median is $224,200.

Explanation:

In the housing market, we generally see most values nearly the same.  However, some values are typically much higher than others.  Between the mean and the median, the mean is the most affected by an outlier; if we have a number much higher than the others, it will cause the mean to raise.  Thus the mean is the higher value.