AZ-900 Describe cloud concepts Practice Question
Which statement best describes the 'economies of scale' advantage of cloud computing for customers?
⚠ Common exam trap
It's easy for candidates to confuse 'economies of scale' with 'free resources' or 'eliminating staff,' when the core concept is about cost reduction through provider-level efficiency and bulk purchasing power.
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
✓
Cloud providers achieve lower per-unit costs through massive purchasing power, offering customers lower prices
Economies of scale in cloud computing means that cloud providers like AWS, Azure, or Google Cloud operate at a massive scale, allowing them to negotiate bulk discounts on hardware, power, and cooling. These cost savings are passed down to customers in the form of lower pay-as-you-go prices, making it cheaper for individual organizations than running their own on-premises data centers.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Organizations save money by eliminating all IT staff when using the cloud
Why it's wrong here
Cloud doesn't eliminate IT staff needs; it shifts focus from hardware management to cloud management.
- ✓
Cloud providers achieve lower per-unit costs through massive purchasing power, offering customers lower prices
Why this is correct
Economies of scale mean lower per-unit costs from massive purchases, enabling cloud providers to offer lower prices to customers.
- ✗
Organizations can use cloud resources without paying anything
Why it's wrong here
Cloud resources cost money; economies of scale make them cheaper than building your own, not free.
- ✗
Organizations pay less because cloud resources are lower quality than enterprise hardware
Why it's wrong here
Cloud providers use enterprise-grade hardware; costs are lower due to scale, not quality reduction.
Go deeper
Related to this question
Learn chapter
What is Cloud Computing?
Key term
Economies of scale
Economies of scale is the cost advantage that businesses get when production becomes more efficient as they grow larger, reducing the cost per unit.
Key term
Cloud computing
Cloud computing is the on-demand delivery of IT resources over the internet, allowing users to access computing power, storage, and applications without owning physical hardware.
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Written by Johnson Ajibi, MSc IT Security
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