A company hosts a web application on multiple Amazon EC2 instances.

A mix of On-Demand Instances and Spot Instances is the best cost-optimized option when the company wants lower cost but does not want long-term commitments. On-Demand Instances provide baseline reliability and require no upfront payment or term commitment. Spot Instances can significantly reduce compute cost for flexible portions of the Auto Scaling group, as long as the application can tolerate replacement capacity when Spot capacity is interrupted. Reserved Instances require a commitment, so options B and D violate the requirement. Dedicated Instances are generally used for compliance or isolation requirements and do not optimize cost for a scalable web application. Auto Scaling groups can use multiple purchasing options to balance availability and cost.