Question

what acts as tiny prism in the formation of a rainbow?

Answer 1

A rainbow is an excellent demonstration of the dispersion of light and one more piece of evidence that visible light is composed of a spectrum of wavelengths, each associated with a distinct color. ... Each individual droplet of water acts as a tiny prism that both disperses the light and reflects it back to your eye.

Answer 2

Formation of a rainbow is one of the best possible example of Dispersion of white light in to spectrum (Seven Colours-VIBGYOR). This phenomenon usually appears just after rain. In this phenomenon, each tiny droplet of water in the sky acts as a tiny prism.