When is a file considered to be compressed?

A file is considered to be compressed when its original size is reduced for storage efficiency. Compression is a technique used to decrease the amount of space a file occupies on a storage medium. This is achieved by removing redundancy and using algorithms to encode data more efficiently, resulting in a smaller file size without necessarily losing any information. Compressed files can include various formats such as ZIP, RAR, and JPEG, among others.

The process of compression is particularly valuable for saving disk space and improving transfer speeds when files are shared over networks. It makes file management more efficient, especially when dealing with large data sets or multiple files that need to be stored or transmitted.

When examining the other options, producing errors while opening a file indicates problems with the file itself rather than its compression status. A file that can only be read by specialized software suggests compatibility issues without inherently relating to its size or being compressed. Lastly, storage in a cloud service does not imply compression; files can be stored in their original or compressed forms.