Color can attract attention, make your message clearer and easier to
comprehend - or it can confuse and disorient (see any issue of Wired magazine
for confusion and disorientation). Just having color is good, but much better
if used with an artistic eye. Not having color is bad.
Before color came to computers, the only way to get decent color in your documents was to start with an artist, stick stuff down with wax and take it to a printer. Time consuming, expensive, difficult to correct and only usable for large runs. If you needed it for only a few copies, expensive photographs had to be include with the document. Now color is fast, cheap and convenient.
Here are the popular options:
Dot Matrix - extinct. For years the only affordable way to get color on paper from a computer was with a dot matrix printer using a 3 color ribbon. Poor quality, poor color, and the ribbon degraded rapidly.
Ink-Jet - Today, color ink-jet printers lead the low priced sector - their manufacturers practically give them away. The image quality they produce can be very high, but the cost per page is pretty significant. The reason ink-jet printers are so cheap because their makers consider them to be "ink vending machines" Cost per page can be quite high. Basically, they are dot matrix printers, so they are also rather slow.
Laser Color laser printers have dropped below the $3,000 mark and now can be afforded by many businesses that have need for faster, better, cheaper color than that provided by ink-jet machines. As long as you can live with 8-1/2 x 11 and 8-1/2 x 14 formats, all is well. Tabloid lasers are available too, but not in the $3000 range.
Wax Transfer and Dye Sublimation - these printers are used where very high quality is required with large areas of color. Some printers can do drafts as wax transfer, finals as dye sub. If you are creating advertisements, these printers are for you. Dye sub can produce results nearly indistinguishable from a glossy photograph. Wax transfer printers start a bit below $2000 and are available in letter and tabloid sizes. Cost per page can be lower than ink-jet if a lot of color is used.
Large format ink-jet printers are available for specialty applications. They print on high quality glossy roll stock, and their output can be a yard wide and many yards long.
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