File Compression is a program or technique used to reduce the size of files so that they occupy lesser space on the disk. It is the correct answer among the given options.

File compression is an important process that helps in saving storage space and reducing the time required for file transfer. It works by compressing the data in a file using various algorithms, which remove redundant or unnecessary information. This compression is reversible, meaning that the compressed file can be decompressed back to its original form when needed.

Below are the key points explaining the importance and benefits of file compression:

1. Efficient use of storage space: By compressing files, the amount of disk space required to store them is significantly reduced. This is particularly useful for files that are large in size, such as multimedia files (videos, images, audio), database backups, and software installers.

2. Faster file transfer: Compressed files are smaller in size, making them quicker to transfer over networks or upload/download from the internet. This is especially advantageous when dealing with limited bandwidth connections or when sharing files with others.

3. Reduced storage costs: By compressing files, organizations can save on storage costs as they require less physical storage space or cloud storage capacity. This can be particularly beneficial for businesses dealing with large volumes of data.

4. Improved system performance: Compressed files take up less disk space, which can lead to improved system performance. This is because the computer's operating system has to manage fewer files, resulting in faster file access and reduced disk fragmentation.

5. Archiving and backup efficiency: File compression is commonly used for archiving and backup purposes. Compressed archives require less storage space, making it easier to store and manage large volumes of files. Additionally, compressed backup files can be transferred or stored more quickly, reducing the backup window.

In conclusion, file compression is a crucial program that reduces the size of files, allowing them to occupy lesser space on the disk. This results in more efficient storage usage, faster file transfers, reduced storage costs, improved system performance, and efficient archiving and backup processes.

File Compression programs reduce the size of files by using various algorithms to compress data, making them occupy less space on the disk.