Week 2 Lab: The Marginal Cost of the Last Customer

An analytical lab — calculate what it actually costs to reach each successive customer on a line, and justify why the last one costs as much as everyone before them combined

1 March 2027

You’re given a rollout brief in the lab: a fictional broadband or rail extension with a customer density map, a per-kilometre trenching cost, and a target coverage percentage. The job is to calculate the marginal cost of connecting each additional 10% of customers, not just the total project cost — the total tells you nothing about where the money actually goes.

Before the lab#

Read week 2’s lecture. Bring a calculator or a spreadsheet; this lab is graded on the working, not just the final number.

In the lab#

Working in pairs, calculate marginal cost per customer-decile from 0% to 100% coverage using the density map provided. Plot it. Then write two or three sentences arguing, from your own numbers, why the last decile costs disproportionately more — and name the one assumption in the brief (route geography, minimum trench depth, whatever it turns out to be) that, if false, would flatten your curve instead of steepening it.

Submitting#

The worked calculation, the plot, and the justification paragraph, from the pair. Due Friday 5 March, 5pm.

Pairs of two.