Which statement best describes the consumption-based pricing model used in the cloud?
Show answer and explanation
Answer: C
Under a consumption-based model, billing follows actual usage meter by meter: a virtual machine running for two hours costs two hours, no more. Nothing is purchased ahead of demand, so there is no idle capacity silently burning money, which is why this is called pay-as-you-go.
Fixed fees, prepaid commitments, and upfront hardware purchases all charge for something other than what is consumed in the moment.
Why the other options are wrong
- A. A fixed monthly fee is charged whether or not the resources get used, which is the opposite of paying only for what is consumed.
- B. Buying hardware upfront and depreciating it is the CapEx on-premises pattern, not a consumption model.
- D. Pre-purchasing annual capacity is a commitment discount; you pay before knowing how much of that capacity you will actually use.