The Lorenz curve is a graphical representation showing income inequality in a society. It plots the cumulative share of total income against the corresponding population percentage. The curve's shape indicates the distribution of income: a more equal society has a curve closer to the diagonal, while a more unequal society has a curve that bends away from it. By comparing different Lorenz curves, economists can assess the level of inequality and measure the extent to which income is concentrated in certain segments of society. This information helps policymakers develop strategies to address inequality and promote fairer distribution of wealth.