Final answer:
JPEG is a popular digital photo format that can display millions of colors and is used because it supports compression, allowing smaller file sizes without substantial quality loss.
Step-by-step explanation:
JPEG stands for Joint Photographic Experts Group, and it is a widely used format for digital photos. The two main reasons the JPEG format is used for digital photos are its capability to display millions of colors and its compression feature. While there are other image formats that can display a large color range, JPEGs are preferred because they can be compressed to create smaller image files without significant loss of quality. This compression is a balance between image quality and file size, allowing for efficient storage and sharing of images.