Auto Scaling is the service that adjusts the amount of compute capacity by automatically scaling the number of EC2 instances in response to changing demand. This ensures that the application has the right amount of resources to handle the load without over-provisioning (which can be costly) or under-provisioning (which can degrade performance). Other options like Elastic Load Balancing and Amazon CloudWatch are related to scaling but do not provide the complete auto scaling capabilities. Elastic Load Balancing distributes incoming application traffic across multiple targets, such as EC2 instances, and Amazon CloudWatch provides monitoring for AWS cloud resources and applications, which can send signals to trigger scaling actions, but by itself does not automatically scale the resources.