Why can AWS offer lower prices than most companies could achieve running their own data centers?
A.AWS subsidizes customers at a loss
AWS is profitable — the advantage is scale economics, not subsidies.
B.Economies of scale — aggregated demand across millions of customers lowers unit costs, savings pass to customers
Correct. Massive aggregated demand → lower unit costs → lower prices.
C.AWS uses older, cheaper hardware
AWS hardware is modern; cost comes from utilization and scale, not age.
D.Cloud requires less electricity than data centers
Power efficiency contributes marginally but isn't the named cloud advantage.
Why this answer
Economies of scale is one of the six cloud advantages: AWS aggregates usage at massive scale, achieving lower per-unit costs that translate into pay-as-you-go pricing.
Correct answer: B · Last reviewed 2026-11-01
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