CLF-C02 Billing, Pricing, and Support Practice Question
Which statement about Amazon EC2 On-Demand pricing is accurate?
⚠ Common exam trap
Many candidates assume On-Demand instances require a minimum commitment (like one month) or that they must run continuously, confusing them with Reserved Instances or forgetting the per-second billing flexibility for Linux instances.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
On-Demand instances are billed per second with no upfront commitment or termination fees
Amazon EC2 On-Demand instances are billed per second (with a minimum of 60 seconds) for Linux instances, and per hour for other operating systems, with no upfront payment or termination fees. This model provides maximum flexibility, allowing you to launch and stop instances as needed without any long-term commitment or penalty.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
On-Demand instances require a minimum commitment of one month
Why it's wrong here
On-Demand instances have no minimum commitment or upfront payment requirement. For Linux instances, billing is per-second with a 60-second minimum after launch, and you can run them for minutes, hours, or years without any contract. There is no one-month minimum term, so this statement is incorrect.
- ✓
On-Demand instances are billed per second with no upfront commitment or termination fees
Why this is correct
Correct: Linux On-Demand EC2 instances are billed per-second, with a minimum charge of 60 seconds after you launch, and you pay no upfront fees and no termination charges when you stop or terminate. This pay-as-you-go model provides maximum flexibility for unpredictable workloads, letting you scale up and down without long-term commitments. In contrast, Reserved Instances and Savings Plans require a 1- or 3-year commitment to unlock discounts.
- ✗
On-Demand instances are the cheapest pricing option for all workloads
Why it's wrong here
This statement is false because On-Demand pricing is the most expensive EC2 purchasing option — it carries no discount in exchange for its flexibility. For steady-state workloads, Reserved Instances or Savings Plans can reduce costs by up to 72%, and Spot Instances are even cheaper for fault-tolerant, interruptible workloads. On-Demand is only appropriate when you need short-term, spiky, or cannot-be-interrupted capacity without commitments, not as an outright cheapest option.
- ✗
On-Demand instances must be running continuously once launched
Why it's wrong here
You are not required to keep an On-Demand instance running after launch; you can stop it and start it at any time. When you stop an instance, compute capacity billing immediately ceases (though attached EBS storage and any reserved IPs are still billed), and you can restart later with the same instance ID and data. Therefore, this option misrepresents the billing and operational flexibility of On-Demand instances.
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