Exercise 3: The General Principle Behind Cloud Pricing Discounts — Possible Solution
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The general principle, per the chapter: "the more you commit in
advance -- in time, and in specificity -- the deeper the discount, and
the less flexibility you retain."

Breaking this down across the three pricing models:

ON-DEMAND: No commitment at all -- you can start or stop usage at any
moment, with no advance notice required. In exchange for this maximum
flexibility, you pay the HIGHEST price. You're trading nothing away,
so you get no discount.

RESERVED/COMMITTED (including Savings Plans, Reservations, Committed
Use Discounts): You commit to a certain level of usage -- sometimes a
SPECIFIC instance type (deeper commitment, deeper discount), sometimes
a more flexible dollar-per-hour spend level via something like a
Savings Plan (less specific commitment, somewhat smaller discount but
more flexibility) -- typically over a 1-3 year period. In exchange for
giving up the ability to freely change your mind about that usage
level for the length of the commitment, you receive a meaningful
discount. You're trading away FLEXIBILITY (both in time and,
depending on the specific option chosen, in exactly what you're
committing to) for a lower price.

SPOT/PREEMPTIBLE: The deepest discount of the three. In exchange, you
give up something different and more severe than a time commitment --
you give up GUARANTEED AVAILABILITY itself. The provider can reclaim
the resource with very little notice at any time it needs the
capacity elsewhere. You're trading away RELIABILITY/CONTROL over
whether the resource keeps running at all, not just flexibility to
change your mind later.

The unifying idea: in every case, the CUSTOMER is taking on some kind
of risk or constraint that makes the resource easier or more
predictable for the PROVIDER to manage and sell -- committed
usage lets the provider plan capacity confidently in advance; spot
capacity lets the provider sell otherwise-idle capacity it would
rather not waste -- and the discount is the customer's compensation
for absorbing that risk or constraint on the provider's behalf.

WHY THIS WORKS AS AN ANSWER
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This directly applies the chapter's own stated principle to each of
the three specific pricing models, identifying precisely WHAT is being
traded in each case (nothing/flexibility/guaranteed availability)
rather than just restating "more commitment = more discount" as an
unexplained rule -- and the closing "unifying idea" paragraph explains
WHY this trade makes sense for the provider too, not just describing
it from the customer's side alone.