Medicare Would Like to Test the Hypothesis That the Average

Multiple Choice

Medicare would like to test the hypothesis that the average monthly rate for one-bedroom assisted-living facility is equal to $3,300. A random sample of 12 assisted-living facilities had an average rate of $3,690 per month. The standard deviation for this sample was $530. Medicare would like to set α = 0.05. Which one of the following statements is true?

A) Because the p-value is greater than α, we fail to reject the null hypothesis and cannot conclude that the average monthly rate for an assisted-living facility is not equal to $3,300.
B) Because the p-value is less than α, we reject the null hypothesis and conclude that the average monthly rate for an assisted-living facility is not equal to $3,300.
C) Because the p-value is greater than α, we fail to reject the null hypothesis and conclude that the average monthly rate for an assisted-living facility is equal to $3,300.
D) Because the p-value is less than α, we fail to reject the null hypothesis and conclude that the average monthly rate for an assisted-living facility is not equal to $3,300.