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    C. Create a launch configuration with Dedicated Instances. Ensure the User Data section details the installation of the custom software. Create an Autoscaling group with the launch configuration.
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    Answer: A
    Explanation:
    Explanation
    Since the application can recover from failures and cost is the priority, then Spot instances are the best bet for this requirement. The launch configuration has the facility to request for Spot Instances.
    The below snapshot from the Launch configuration section shows that Spot Instances can be used for AutoScaling Groups.

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    * http://docs

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