Question

"if a large portion of total income is concentrated in the hands of few people, average income fails to reflect real distribution of income." how? ​

Answer 1

Answer:

Explanation:average income means total income per total population which means that the average income is the amount on which every person of the country have right but if a large amount is given in the hands of few people than there will be no equal distribution and hence no real distribution .

Answer 2

If a large portion of total income is concentrated in hands of few people, average income fails to reflect the real distribution of income due to income inequality.

• Income inequality is known as a notable imbalance in the equal distribution of income.
• Such a scenario leads to a high-income concentration typically in the hands of a minute percentage of an active population.
• If income inequality exists, there is a broad difference between the economic resources of one specific group of the population and that of another.  
• The separations from income inequalities and analysis that are used to explain income disparity may also vary. It does not reflect the real distribution clearly.