The distortion factor is a measure for non-linear distortions of audio signals.
So-called overtones are added to the original sound. The lower the distortion factor of a system, the better. A high distortion factor makes the sound shrill.
In general, a distortion factor of at least 1 per cent is perceptible to trained listeners; for normal ears, 5 per cent distortion factor represents a critical limit. Today, the quality of amplifier components is so high that distortion is usually not a problem - unless you expect too much from your amplifier.
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