Microservices can scale both directions, same as other systems. You can allocate more resources to individual service instances (vertical), and you can allocate more service instances (horizontal). The later scaling should be done in an automated fashion.
If you look at something like Spring Boot, you will find that an individual service instance is a stand-alone application server. That is what is duplicated when a new service instance is created.
If you look at something like Spring Boot, you will find that an individual service instance is a stand-alone application server. That is what is duplicated when a new service instance is created.