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Photographic images can be saved in different file formats. The format of choice is one that does not lose color quality, contrast, or file size.
TIF or EPS files are examples of lossless file formats. They are designed to print clear and crisp at a resolution of 300dpi at their final size in the layout.
JPEG/JPG or GIF files are examples of lossy file formats. They were originally designed for easy file transmission and Internet use, not for printing. When a lossy file format is saved over and over again, the jagged edges are exaggerated. The process creates extra pixel garbage that you do not want printed. Therefore, if you start with a JPEG file that then needs edits, save it as an EPS or TIF file. This way, additional information will not get lost and the quality of the original JPEG image will be maintained.