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When an atom is in ground state by exposing it in front of a photon of frequency :
It can go to a higher energy state E2 by the process of stimulated absorption. 
From higher state E2 to a lower state E1 ,it may come by two precesses :
i) Spontaneous Emission 
ii) Stimulated Emission 
i) Spontaneous Emission : In this type of emission, the emitted photons are emitted randomly that is they are not in same phase. 
ii) Stimulated Emission : If the atom in excited state E2 is exposed in front of a photon of frequency :
It will jump to ground state emitting two photonsof same frequency & in same direction and in same phase. The two photons go off together as a coherent radiation. 

Under ordinary conditions of thermal equilibrium, the number of atoms in
higher energy state E2 is considerably smaller than the number in lower energy state
E1 (N2 < N1), so that there is very little stimulated emission compared with absorption. 
If, however, by some means, the number of atoms in the higher energy state be made sufficiently larger than the number in the lower energy state, then stimulated emission is promoted.

The situation in which the number of atoms in the higher energy state exceeds that in the lower energy state (N2 > Ni) is known as “population inversion”. In this situation, the assembly of atoms would lase.
Stimulated emissions are further encouraged by increasing the radiation density u(v)
of the stimulating radiation. This is achieved by enclosing the emitted radiation in a
“cavity” between two parallel reflectors.

The radiation repeatedly travels back and forth, and the photons passing through the atoms go on multiplying by repeated stimulated emission. Hence a strong coherent beam of light emerges from the system.

Fig. Light amplification