80-20 Rule

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Pareto's Law 80-20 Rule Income Distribution Economic Inequality Paretian Optimum Pareto Optimality Wealth Distribution Economics

Pareto's Law, also known as the 80-20 Rule, posits that roughly 80% of effects come from 20% of the causes. In economics, it highlights income distribution where a small percentage of the population controls the majority of the income. This principle is essential for understanding resource allocation, inequality, and economic strategies for improving the lot of the poor.