A very common and typical example is the AGC used in AM radio. Such a receiver is essentially linear - that is, the output is proportional to the input. This is a necessary requirement because the information content of the signal is carried by the changes of amplitude of the carrier frequency. If the circuit were not linear, the modulation could not be recovered with reasonable fidelity. However, the strength of the signal received will vary widely, depending on the range to the transmitter, signal path attenuation, and so on. Clearly it is undesirable that the output volume of the receiver varies accordingly - a listener would not wish to strain to hear a distant signal or to have damage to their hearing if the transmitter was in the next street. AGC solves this problem by measuring the overall strength of the signal and automatically adjusting the gain of the receiver to maintain a constant level of output. When the signal is strong, the gain is reduced, and when weak, the gain is increased, or allowed to reach its normal maximum.
It is usually advantageous to reduce the gain of the front end of the receiver, which has benefits for both the amount of noise in the signal, and performance in the presence of strong signals, such as blocking rejection.
AGC is also found in many types of tape recorder, including basic cassette decks and VCRs, the object being to record to tape a good quality signal but one that does not saturate the tape and cause distortion and other problems, even if the signal to be recorded varies in level. Video copy control schemes such as Macrovision exploit this, inserting signal spikes which will are ignored by most televisions but cause the deck's AGC to overcorrect and corrupt the recording.