Interpret break-even charts.

Direct answer

The business would plot the total cost curve, including fixed costs such as platform hosting and variable costs like customer support per subscriber, against the total revenue curve, which rises with the number of subscribers at the new price. The intersection gives the break-even subscriber count. If the expected market size and target subscription price place the break-even point well below the realistic maximum number of subscribers, the tier is likely viable. Conversely, if the break-even point is too high, the business may need to lower the price, reduce costs, or target a niche market. The chart also shows how changes in fixed or variable costs shift the curves, allowing the business to evaluate sensitivity to cost changes.

How it works

The answer demonstrates cause‑and‑effect reasoning: cost structure and pricing determine the break‑even point, which informs feasibility. It balances conditional factors such as market size and cost assumptions.