Change in total cost per unit of change in output is defined as:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Short run marginal cost.
The short run marginal cost (SMC) is defined as the change in total cost per unit of change in output.
SMC = Change in Total Cost/ Change in Output = ∆TC/ ∆ q
where ∆ represents the change in the value of the variable.