CLF-C02 Question 6
Single answerA small e-commerce business is considering migrating its infrastructure to AWS to reduce costs and improve scalability. The business owner learns about the concept of economies of scale in AWS. Which of the following best explains how economies of scale can help reduce costs in this scenario?
- A
AWS negotiates lower hardware and operational costs due to its large customer base and passes those savings to customers.
- B
AWS provides custom discounts to small businesses based on their specific usage patterns.
- C
AWS charges customers based on the number of employees in their organization, which reduces costs for smaller businesses.
- D
AWS gives every customer access to free cloud resources indefinitely, reducing overall operational expenses.
Show answer and explanation
Correct answer: A
Explanation
AWS achieves economies of scale by operating at a large scale, which enables it to procure resources more cost-effectively and pass those savings on to customers. This is a fundamental principle of cloud computing and one of the reasons AWS can offer competitive pricing compared to on-premises solutions.
- A. Correct.
Correct. AWS achieves economies of scale by operating at a massive scale, allowing them to negotiate lower costs for hardware, power, and operations, which they then pass on to customers in the form of lower prices.
- B. Incorrect.
Incorrect. While AWS does offer cost-saving programs like Savings Plans or Reserved Instances, custom discounts are not a core part of how economies of scale work in AWS.
- C. Incorrect.
Incorrect. AWS pricing is based on resource usage (e.g., compute, storage) rather than the number of employees in an organization, so this option is not relevant to economies of scale.
- D. Incorrect.
Incorrect. While AWS offers a Free Tier for limited usage, this is not related to economies of scale, as the Free Tier is a marketing initiative rather than a cost-saving strategy derived from scale.