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Photoshop and DPI

I'm using Photoshop Elements 4, so maybe this doesn't apply to later versions.

Why, when I go to create a new image in Photoshop Elements, does it insist on a dpi (dots per inch) setting?

Digital images don't have a size, they just have a number of pixels vertically and horizontally, so you can't specify the number of dots per inch - it depends on the device that is displaying/printing/projecting the image.

Just think of a projector displaying a 600 by 800 pixel image - shine it on a surface just a few inches away and the image could measure 6 inches by 8 inches - 100 dots per inch.  But move the projector further away and the image could be 60 inches by 80 inches - now it's only 10 dots per inch - but the digital image itself has not changed!

So digital images don't have size dimensions - only pixels.

So why does Photoshop Elements keep talking about dpi?

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