Question

As AWS grows, the cost of doing business is reduced and savings are passed back to the customer with lower pricing. What is this optimization called?

a) Cost Minimization
b) Price Reduction
c) Economies of Scale
d) Cost Efficiency

Answer 1

The optimization described is called Economies of Scale, which refers to the situation where the cost per unit decreases as the quantity of output increases. AWS can pass on cost savings to customers through lower pricing.

Step-by-step explanation:

The optimization described in the question is called Economies of Scale. It refers to the situation where, as the quantity of output increases, the cost per unit decreases. This allows businesses, like AWS, to reduce their costs and pass on the savings to customers through lower pricing.

For example, as AWS grows and expands its operations, it can benefit from economies of scale by building larger data centers or purchasing hardware in bulk, which lowers the cost per unit of computing resources. This cost efficiency enables them to offer lower prices to their customers.