ANSWERS: 1
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Photolabs today use a machine to do all the work. The roll is placed in a holder while the end of the roll is taped to a leader card. The holder is inserted into the machine(at least the machine that I use, a MasterLab). The machine extracts the film from the canister, runs it through 4-5 different chemicals, and then sends it out through the dryer. The film is done processing. After processing is finished, the film is inserted into the film deck, making sure to note which side the DX-code is on. All I have to do is line up the first photo in the film deck, and press Auto. They scan. After the finish scanning, some should already be coming out of the printer. All that's left to do after they print and you make sure that there isn't anything wrong with the pictures is to cut the negatives. To answer your questions simply, they do a mix of both. The machine develops the film, then uses the darkroom technique to project light through the negatives onto the blank paper. After running the exposed paper through chemicals, the picture shows up.
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