What does 'elasticity' in cloud computing refer to?

Elasticity in cloud computing specifically refers to the ability of a system to automatically scale resources up or down according to the current demands. This dynamic allocation allows organizations to efficiently respond to changing workloads, ensuring that they have enough computational power or storage when needed, and reducing resources during times of low demand to optimize costs.

This characteristic of cloud services is one of the fundamental benefits of utilizing cloud computing, as it enhances flexibility and efficiency. The other options focus on aspects that do not encapsulate the main essence of elasticity; for example, static allocation does not allow for responsive scaling, while time taken for resource deployment and cost-effectiveness, although important factors, do not directly define the dynamic capacity of resources that elasticity emphasizes.