How does a browser determine what to display, an image or text?

The browser determines the content type based on the Content-Type HTTP header. For images, it usually has the form image/<image_format>, for example, image/jpeg or image/png. If the header indicates an image type, the browser interprets the received data as graphics and displays them. If the header is missing or indicates a different type (for example, text/html), the browser processes the data accordingly.