Which solution will meet these requirements?

Explanations:

Using Spot Instances for the entire workload could lead to interruptions during high-demand periods, as Spot Instances can be terminated by AWS with little notice when the spot price exceeds the user’s bid price. This could negatively affect the application’s availability, especially during peak usage times.

Using Reserved Instances for the baseline level of usage ensures that the company has guaranteed capacity for the application’s steady overnight and baseline demands. Spot Instances can be used for additional capacity during the peak 8-hour periods, allowing for cost savings while still meeting demand. This approach balances cost efficiency and availability.

Using On-Demand Instances for the baseline level of usage means the company will incur higher costs compared to Reserved Instances. While Spot Instances can help manage costs during peak times, relying solely on On-Demand pricing for the baseline is not cost-effective for a steady workload, particularly during low usage periods.

Using Dedicated Instances for the baseline level of usage is generally more expensive and does not provide cost savings. While it offers physical isolation, it is unnecessary for most applications that do not have compliance requirements. On-Demand Instances for additional capacity would further increase costs without optimizing for the usage patterns described.