When performing lossy audio encoding, such as creating an MP3 file, there is a trade-off between the amount of space used and the sound quality of the result. Typically, the creator is allowed to set a bit rate, which specifies how many kilobits the file may use per second of audio. The higher the bit rate, the larger the compressed file will be, and, generally, the closer it will sound to the original file.
Is there an answer to this question (If it cannot be answered, say "unanswerable"): What would an example of lossy audio encoding be?
creating an MP3 file