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One standard file format in digital cameras is the JPEG file, which compresses the data of the sensor, thus allowing for much more pictures to be stored in the memory card than in the case of the raw files. In exchange, the quality of the image suffers to a certain extent.
Because of the large amount of memory they need, raw files are used when a high image quality is required and, what is more important, when the image is intended to be processed afterwards on a computer.
The cameras which allow saving images in raw format offer this option in addition to the JPEG file format, which - as said - is a standard in digital photography.