Bare-metal hypervisors can dynamically allocate available resources depending on the current needs of a particular VM. A type 2 hypervisor occupies whatever you allocate to a virtual machine.

When you assign 8GB of RAM to a VM, that amount will be taken up even if the VM is using only a fraction of it. If the host machine has 32GB of RAM and you create three VMs with 8GB each, you are left with 8GB of RAM to keep the physical machine running. Creating another VM with 8GB of ram would bring down your system. This is critical to keep in mind, so as to avoid over-allocating resources and crashing the host machine.