Your question is Scaling Horizontally vs Vertically. Take a moment with it on the right.
Talk me through your thinking if you like. When you're confident, submit your answer and I'll grade it like a real screen (7/10 or better passes).
Explain the difference between horizontal and vertical scaling and when to use each.
Contrast adding instances with increasing the resources of an existing instance. Address availability, state management, operational complexity, cost, performance limits, and security implications. Give a practical recommendation for a service running on AWS or Kubernetes, including how you would verify the decision with load testing and monitoring.