Water vapor condenses into clouds when the air temperature is cool enough. The higher you go in the atmosphere, the cooler it gets. At some point as you rise higher, you hit the exact temperature at which condensation occurs. Below that point, no cloud. Above that point, cloud. That’s why clouds have flat bottoms.
Some clouds exist well above that point, so they are puffy on all sides. Sometimes the temperature all the way down at ground level is cool enough to create condensation, in which case we get clouds right here on the ground, and we call it fog.
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