Okay, there is a simple relationship between the threshold levels in
your example, so all you will need is the following formula in cell A3:

=IF(A2<=(A1*4000+6000),"Free",IF(A2<=(A1*5000+1000 0),
"Reduced","Paid"))

assuming that A1 contains the number of people and A2 is the income.

Try that out with some example values.

Pete