To find the maximum compression of the spring when a block of mass 2.0 kg is dropped from a height of 55 cm onto it, the conservation of energy principle is applied. The potential energy of the block at the height is converted into kinetic energy just before it hits the spring and then into elastic potential energy in the spring. The equation used is mgh = 1/2 kx², where m is mass, g is gravitational acceleration, h is height, k is the spring constant, and x is the compression distance. By substituting the values into the equation, the maximum distance the spring is compressed can be calculated. This approach effectively demonstrates the energy transformation involved in the process.