**Core Concept**
The early response to iron therapy in iron deficiency anemia is primarily due to the mobilization of iron from storage sites, which is reflected by an increase in serum ferritin levels. This process occurs before a significant increase in hemoglobin or hematocrit.

**Why the Correct Answer is Right**
The correct answer is based on the pathophysiology of iron deficiency anemia. When iron therapy is initiated, the body first mobilizes iron from storage sites, such as the reticuloendothelial system, before it is utilized to produce new red blood cells. This process is reflected by an increase in serum ferritin levels, which is an early indicator of response to therapy. This is because serum ferritin is a marker of iron stores, and an increase in its levels indicates that the body is mobilizing iron from storage sites.

**Why Each Wrong Option is Incorrect**
**Option A:** This option is incorrect because an increase in hemoglobin or hematocrit levels is a later indicator of response to iron therapy, as it reflects the production of new red blood cells, which takes longer to occur.
**Option B:** This option is incorrect because an increase in mean corpuscular volume (MCV) is a later indicator of response to iron therapy, as it reflects the production of new red blood cells with larger volumes, which takes longer to occur.
**Option C:** This option is incorrect because an increase in total iron-binding capacity (TIBC) is a marker of iron deficiency anemia, and its decrease is an indicator of response to iron therapy.

**Clinical Pearl / High-Yield Fact**
A key point to remember is that serum ferritin levels should be monitored regularly to assess the response to iron therapy in patients with iron deficiency anemia. This is because an increase in serum ferritin levels is an early indicator of response to therapy, and it can help guide treatment decisions.

**Correct Answer: C. Increase in serum ferritin levels.**