If you click the “Details” button next to the star rating of a business page on Yelp.com, you'll find the Monthly Trend graph (example below). The algorithm for our monthly trend was created to show a fair and useful trend line, regardless of whether a business receives hundreds of reviews per month or only a handful.
If a business receives 10 or more reviews in a given month, we plot the average of those on our graph for that month. If there are less than 10 reviews in a given month, we'll include past reviews with the new ones until we have a total of 10 from which to draw the new month's average. By including these past ratings, we minimize the effect that a month with only a few very high or very low ratings has on the overall trend.
This results in a trend graph that's fair to businesses receiving only a few reviews per month, while still providing Yelpers with accurate and valuable data.