Reserved Instances (RIs)offer a significant discount (up to 75%) compared to On-Demand pricing in exchange for committing to use AWS for a period of 1 or 3 years. This pricing model is ideal for applications with predictable usage patterns or long-term commitments, such as critical production systems that will be running for at least 3 years.

A. On-Demand Instances: Incorrect, as they provide flexibility without commitment but are more expensive over the long term.

C. Spot Instances: Incorrect, as they offer the lowest cost for non-critical, interruptible workloads but are not suitable for critical production systems due to their potential for sudden termination.

D. AWS Free Tier: Incorrect, as it provides limited free usage for certain AWS services for a short period (typically one year) and is not intended for long-term production workloads.

AWS Cloud References:

Amazon EC2 Reserved Instances