Change in total cost per unit of change in output is defined as:

Option 1 -> Marginal cost is defined as change in total cost per unit change in output (∆TC/∆Q).

Option 2 -> Average fixed cost is total fixed cost divided by output (AFC = TFC/Q), not the change in cost.

Option 3 -> Short run average cost is total cost divided by output (SAC = TC/Q), not the change in cost.

Option 4 -> Average variable cost is total variable cost divided by output (AVC = TVC/Q), not the change in cost.

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Hence, Option 1: Short run marginal cost -> Marginal cost represents the additional cost incurred when producing one more unit of output. It is calculated as the change in total cost (∆TC) divided by the change in quantity (∆Q). In the short run, this includes changes in variable costs as fixed costs remain constant. This concept is crucial for production decisions as firms compare marginal cost with marginal revenue to determine optimal output levels. -> correct