A dairy company, Farley Farm, has total costs of $10,000 and total variable costs of $3,000. Farley Farm's total fixed costs are

A) $0.
B) $7,000.
C) $13,000.
D) indeterminate because the firmʹs output level is not known.

Total Costs

The sum of all expenses a firm incurs in producing a product or offering a service, including both fixed and variable costs.

Total Variable Costs

The sum of all costs that vary with output level, including materials, labor, and other expenses that change with production volume.