The best example of a short-run variable cost for an entrepreneur who bakes pizzas would be the cost of labor, as it changes with the level of output. Rental and machinery costs are fixed in the short term.
When considering the variable costs in the short run for an entrepreneur who bakes pizzas, it's essential to understand that variable costs change with output level, whereas fixed costs remain constant regardless of the output. In the case of the entrepreneur, the cost of labor used to bake pizzas and the cost of ingredients used to bake pizzas are examples of variable costs, as they will vary based on the amount of pizzas produced. However, among the options provided, the best example of a short run variable cost is the cost of labor (1), since it can be adjusted in the short term with changes in the production level - hiring more workers or reducing the workforce as needed. Conversely, the cost of renting the facility (2) and the cost of machinery (3) are typically considered fixed costs in the short run because these cannot be easily changed until the lease expires or the machinery is fully depreciated or replaced.