Geometric mean - meaning, merits, demerits, and uses

Geometric Mean - Meaning, Merits, Demerits and Uses

Geometric Mean (G.M) 

It is defined as nth root of the product of n items or values.

i.e., G.M. = n√ (x1. x2. x3 ……xn)

Merits of G.M.:

1. It is not affected by the extreme items in the series.

2. It is rigidly defined and its value is a precise figure.

3. It is capable of further algebraic treatment.

4. It is Useful in calculating index number.

Demerits of G.M.:

1. It is difficult to understand and to compute.

2. It cannot be computed when one of the values is 0 or negative.

Uses of G.M.:

1. It is used to find average of the rates of changes.

2. It is Useful in measuring growth of population.

3. It is considered to be the best average for the construction of index numbers.

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