It appears that the number of people employed by a typical American

The argument says the 'typical' software firm employs fewer people now than in 1980. That conclusion is based on a study which compares the number of employees in 1980 and now at the *same* firms. The study thus ignores any firms that came into existence after 1980. Those newer firms might be today's 'typical' software firms, so you can't just ignore them, which is why C is correct.

E is not correct; if you want to work out what is 'typical', you normally want to look at the median and not the average. The average takes into account wildly extreme values (that is, values which are *not* 'typical'), and the median does not. For example, if some entrepreneur making $10 billion per year were to buy a house in an otherwise low-income neighbourhood, the average annual income in that neighbourhood would be enormous, because that $10 billion would make a significant contribution to the sum of the incomes in the neighbourhood. The average would not represent the 'typical' income level for that neighbourhood. The median would, however, represent in some way the typical income, since (being a bit imprecise) half of people will earn more than the median, and half will earn less. The presence of one extreme income in the neighbourhood barely affects the median at all. So for the argument in question, you genuinely do want to look at the median and not the average precisely because you do not want some extreme values to distort your statistics.