When following the rational rule for sellers in competitive markets, it is not true that:

• A. Sellers should produce until marginal cost equals market price.
• B. Profit is maximized when marginal cost equals marginal revenue.
• C. Firms are price takers in a perfectly competitive market.
• D. Sellers can influence the market price by adjusting their own output.

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the rational rule for sellers in competitive markets, which states that firms maximize profit by producing the quantity where marginal cost (MC) equals marginal revenue (MR). In perfectly competitive markets, marginal revenue equals the market price (P).
2. Step 2: Recognize that in a perfectly competitive market, firms are price takers, meaning they accept the market price as given and cannot influence it by changing their own output.
3. Step 3: Analyze the statements given: (a) Sellers should produce until MC = market price, (b) Profit is maximized when MC = MR, (c) Firms are price takers, and (d) Sellers can influence the market price by adjusting their own output.
4. Step 4: Identify that statements (a), (b), and (c) are true according to the theory of perfect competition, while statement (d) contradicts the price-taking assumption because individual sellers cannot influence market price.
5. Step 5: Conclude that the incorrect statement is that sellers can influence the market price by adjusting their own output, which is not true in perfectly competitive markets.