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Illustrator is far better for logos. Reason being that it produces vector graphics which can be easily scaled and resized without losing quality. Clients usually need many sizes of images. When you resize raster images they often become blurry and distorted. Illustrator will allow far cleaner lines and clearer graphics regardless how many times it is resized. I'm curious as to how many people that answered Photoshop actually do paid graphic design work. Photoshop is great for raster images and finishing touches on designs.
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