Question: A consumer advocacy group is concerned about the variability in the cost of a generic drug. There is cause for concern if the variance of

A consumer advocacy group is concerned about the variability in the cost of a generic drug. There is cause for concern if the variance of the cost exceeds 5 ($)2. The group surveys seven local pharmacies and obtains the following prices (in $) for a particular generic drug: 32, 36, 38, 32, 40, 31, 34.
a. Use the p-value approach to test if there is a cause for concern for the consumer group at a 1% significance level.
b. What assumption regarding the generic drug prices was made in this analysis?

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