What is average income and what are it's limitations?
Answers
the basic limitations are that they are not able to overspend on excessive things that are not meant for them.
Average income or Per capita income (PCI) estimates the common salary obtained per person in a particular city, area, nation, in a particular year. It is computed by dividing the area's cumulative earnings by its entire community.
Average has many limitations:
Average income gives us unspecified data about the non-materialistic commodities and assistance due to which one cannot obtain the exact calculations.
Due to the unequal distribution of wealth, when National revenue raises its disposal make the wealthy wealthier and the poor poorer.
Augmentation of the goods to commercial benefit may be greater than its capital cost. For example, the money estimation of salt, skewer, string incorporated in national income is economical than their participation in economic well-being.