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A Venn diagram is a visual depiction of the similarities and differences between two or more different items. It consists of a series of shapes - usually circles - whose edges overlap. While it's not required that you use a circle, it's probably the most convenient shape because several circles can overlap easily.
Each shape represents some group or entity. Characteristics the two entities have in common are found where the shapes overlap. Items unique to only one entity are written in the non-overlapping part of their respective shapes.
If all the features of one entity are among additional features of another entity, the entire shape of the first entity is contained within that of the second.
Venn diagrams are useful in any situation requiring a direct comparison of two or more categories or concepts. Their function varies from an informative poster to a decision-making tool.