Interpreting the Lorenz curve is crucial to understanding income inequality. The curve plots the cumulative share of income against the population percentile. A perfectly equal distribution of income would result in a straight diagonal line, while a curved line signifies inequality. The further the curve deviates from the diagonal, the greater the income disparity. By analyzing the shape of the curve, policymakers and economists can gauge the extent of inequality in a society. The Lorenz curve provides valuable insights into wealth distribution, allowing for targeted interventions that address disparities and promote economic justice. Its interpretation is pivotal in formulating equitable policies.