Clouds are formed when air contains as much water vapor as it can hold. This is called the saturation point, and it can be reached in two ways. First, moisture accumulates until it reaches the maximum amount the volume of air can hold. The other method reduces the temperature of the moisture filled air, which in turn lowers the amount of moisture it can contain. Saturation, therefore, is reached through evaporation and condensation, respectively. When saturation occurs, moisture becomes visible water droplets in the form of fog and clouds.
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