Break-Even Analysis with Three Alternatives
Adding another alternative makes the analysis more complicated, but it's still straightforward. With three alternatives it's easier to look at the solution graphically than discuss the mathematical method. We'll use the ISP example from above and add in another pricing plan. Suppose that Plan C is a flat rate per month of $50 with unlimited hours.
Cost under Plan C = $50
Figure 19.2 shows the graphical version of the analysis with the three ISP price plans.
Figure 19.2. The graphical solution to the three ISP price plan analysis
There is still a break-even point at 15 hours per month between Plan A and ...
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