Long answer…
This little tutorial explains how digital audio “works”.
FILE SIZE -
For uncompressed files (i.e. WAV) it’s easy to calculate file size. There are 8-bits in a byte so “CD quality” is 16-bits/8 x 44.1kHz x 2-channel stereo = 176kB per second, or about 10MB per minute.
FLAC is lossless compression and it’s usually about half the size of the uncompressed data.
MP3 and MP4 (aka M4A or AAC) is lossy compression and data is thrown away to make a smaller file. A good quality (high bitrate) MP3 is about 1/5th the size of CD quality files. It’s “smart” and it tries to throw-away details you can’t hear and it can often sound as-good as the uncompressed original but information is being thrown away. As you go lower in bitrate, more data is thrown away and at some point you’ll notice quality loss.
MP3 doesn’t store individual samples so it doesn’t have a “bit depth”. It does have a sample rate (up to 48kHz).
Audacity AUP3 project files use 32-bit floating point data, plus it collects “undo” information so project files can be very large.
The bitrate is also related to file size. There bitrate for audio files is usually expressed as kbps (kilobits per second) and it’s often used as an indication of quality for compressed files. You can divide by 8 to get file size in kilobytes per second. We don’t usually “talk about” the bitrate for uncompressed audio, but CD audio is 16 x 44.4 x 2 = 1411kbps. The highest bitrate for MP3 is 320kbps.
Audio files often contain metadata (“tags”) and any embedded artwork adds to the file size and it’s not included in the bitrate calculation. (Audacity doesn’t support embedded artwork.)
QUALITY -
CD quality (16/44.1) is generally better than human hearing but some “audiophiles” like higher resolution and the only downside to higher resolution is bigger files.
But up-sampling doesn’t automatically improve the sound. It’s sort-of like copying a VHS tape to Blu-Ray… That doesn’t give “Blu-Ray” quality,
Audio is two-dimensional. The bit depth represents the amplitude resolution With 16-bits you can “count” from -32,768 (for the negative half of the wave) to +32,767 (for the positive half). With 8-bits you can only count to 255.(1)
The higher the resolution the more “steps” so the finer the resolution. (The “steps” are filtered-smoothed at the output of the DAC.)
If you want to know what “low resolution” audio sounds like you can export as 8-bit WAV. (2)
The sample rate (kHz) determines the frequency resolution. The audio frequency is limited to half of the sample rate. i.e. CD audio can’t go above 22,050Hz. The filtering/smoothing isn’t perfect so you can’t quite go that high but CDs usually to go to 20kHz which is the “traditional” human hearing limit.
If you start with a good music file and export at 8kHz you’ll notice the loss of highs.
(1) Just to complicate things… 8-bit WAVs don’t store negative values. The data is biased or offset but it’s “corrected” when played so the electrical signal coming-out of the DAC does go negative.
(2) If you do that, go to Edit → Preferences → Quality and set both dither settings to “None”. Dither is added noise that’s supposed to sound better than the “natural” quantization noise. So dither will “mess up” the low-resolution experiment.