Final answer:
Sellers should sell one more item when the marginal cost is less than the marginal revenue, as each additional unit sold contributes to increasing profits up to the point where MR equals MC. The correct option is b) Marginal cost is less than marginal revenue.
Step-by-step explanation:
The rational rule for sellers regarding whether to sell one more item is based on two key economic concepts: marginal cost (MC) and marginal revenue (MR). If the firm is producing at a quantity where the marginal cost is less than the marginal revenue, it implies that each additional unit sold adds more to revenue than it costs to produce. Consequently, in this scenario, the firm should expand production. Conversely, if the marginal cost exceeds the marginal revenue, the firm is actually losing money on each additional unit produced, and thus, it would increase its profits by decreasing output until MR equals MC.
In light of these principles, the correct option for when a seller should sell one more item is when the marginal cost is less than the marginal revenue. Therefore, the answer to the student's question is b) Marginal cost is less than marginal revenue.