Each extra bit adds about 6 dB of dynamic range. 16-bit audio, the CD standard, offers about 96 dB; 24-bit offers about 144 dB, more than enough for recording and mixing headroom.
MP3 and other compressed formats do not store bit depth in the same way; they discard information the ear is less likely to notice. WAV files keep full detail.
Using it in a prompt
Not a prompt term. Choose WAV for editing and mastering and MP3 for previews and quick sharing.