Answer:
To infer a price for the houses in that neighborhood, it is better to use the median.
Step-by-step explanation:
We have the following prices:
$ 120,000
$ 130,000
$ 140,000
$ 150,000
$ 1,110,000
Now, if we do it for the median, it is the best option, because there is a very distant value and the median is not much affected. The value that is inferred through the average is $ 140,000, a value close to the first 4 houses.
If we do it by the mean, the value would be:
(120,000 + 130,000 + 140,000 + 150,000 + 1,110,000) / 5 = $ 330000
a value very far from all the prices of the houses, this is due to the value so far from the last house.
In other words, to infer a price for the houses in that neighborhood, it is better to use the median.
