N electronics store placed an ad in the newspaper showing flat-screen TVs for sale. The ad says "Our flat-screen TVs average $649." The prices of the flat-screen TVs are $1279, $1000, $1500, $895, $649, $1100, $1299, and $649. a. Find the mean, median, and mode of the prices. b. Which measure is the store using in its ad? Why did they choose it? c. Which measure would a consumer want to see advertised? Explain.

Please refer to Explanation

Explanation:

a) Mean

Calculated by adding up all the variables and dividing by their number.

= (1,279 + 1,000 + 1,500 + 895 + 649 +

+ 1,100 + 1,299 + 649)/ 8

= 8,371/8

= $1,046.38

Mode is the highest appearing number.

If the numbers are arranged in Ascending order we get,

649, 649, 895, 1,000, 1,100, 1,279, 1,299, 1,500

We can see that the Mode is $649.

The Median is the number in the middle. If there is an even distribution then there will be 2 numbers in the middle. To find the middle one will therefore be average of the 2 in the middle.

649, 649, 895, 1,000, 1,100, 1,279, 1,299, 1,500

The two numbers are 1,000 and 1,100.

Average is,

= (1,000 + 1,100) / 2

= 2,100/2

= $1,050

b) The store is using the Mode and they are most probably using it because it is the lowest price. They are using that low price to entice people to come and patronize them.

c) The Customer would want to see the Mean advertised. The mean is a truer representation of the prices of the television and gives the consumer therefore, a better estimate regarding how much the television sets cost. This will enable them to budget better.