Penal code 484 defines theft, Penal Code section 488 defines petty theft. Often the two are written in combination (i.e. 488/484) or used interchangeably (incorrectly).
Petty theft is theft of goods under $400. There is a code section (Penal Code section 490.1) that can be charged for theft of goods with a value of $50 or less from a retailer. However, that is not automatic. It is in the prosecutor's discretion to charge the infraction (or to reduce the charge to an infraction).
The letter from the store's attorney brings up two issues:
1. The DA may decide that your daughter and the other girl were working together, making them each responsible for the total theft amount. If it can be shown that they each stole independently, then it keeps your daughter with the $10 theft. (Also - note that the value of an item in a retail theft is set at the sales price plus sales tax).
2. The letter is a "civil demand letter." It has no bearing on the criminal charges, so paying it doesn't guarantee anything except you can't be sued civilly for the cost of the theft & investigation. Also, paying the demand may be construed as an admission of guilt that could be used against your daughter.
You've got several things in play here. I would suggest you discuss this with a criminal defense attorney in your area. They can assist you with the demand letter, as well as with the criminal charges to hopefully get this off your daughter's criminal record. A theft conviction isn't something she wants to carry through life.
And sorry - to answer more directly your original question:
Petty theft is a misdemeanor. It can be an infraction under the circumstance I discussed above, but even theft of a dollar's worth of merchandise can be charged as a misdemeanor by the DA.