The Lawn Ranger, a landscaping company, has total costs of $5,000 and total variable costs of $1,000. The Lawn Ranger's total fixed costs are
A) $0.
B) $4,000.
C) $6,000.
D) indeterminate because the firm's output level is unknown.

Question

Quizplus · Accepted Answer

Total fixed costs are calculated by subtracting total variable costs from total costs. Therefore, $5,000 - $1,000 = $4,000.

The Lawn Ranger, a Landscaping Company, Has Total Costs of $5,000