Vertical distribution of different species occupying different level is called:

Stratification

The correct answer is Option (2)- Stratification

Interaction of biotic and abiotic components result in a physical structure that is characteristic for each type of ecosystem. Identification and enumeration of plant and animal species of an ecosystem gives its species composition.

Vertical distribution of different species occupying different levels is called stratification. For example, trees occupy top vertical strata or layer of a forest, shrubs the second and herbs and grasses occupy the bottom layers.