Question
What is a Lorenz curve? What does it show?

Answer

This is a modification of the Ogive when the variables and the cumulative frequencies are expressed as percentages. It serves to measure the evenness of the distribution and is useful in picturing the distribution and dispersion of wealth, sales and profits etc. If we get a line which is a diagonal of the square, it implies that variable is evenly distributed amongst population. Farther is the line from this diagonal, higher is the inequality and vice versa.

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