This is where break-even analysis comes in, a tool that helps you understand the relationship between costs, revenue, and profit.
Break-even quantity
The level of output at which a business's total revenue exactly matches its total costs, resulting in no profit or loss.
$$\text{Break-even quantity} = \frac{\text{Fixed Costs}}{\text{Contribution per Unit}}$$
The amount each unit contributes to covering fixed costs after variable costs are deducted.
Once you know your break-even point, you can calculate profit or loss based on actual sales.
$$\text{Profit or Loss} = \text{Total Revenue} - \text{Total Costs}$$
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Paywall
(on a website) an arrangement whereby access is restricted to users who have paid to subscribe to the site.
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