# Perfect Substitute Goods

Perfect Substitute Goods are those goods that can satisfy the same necessity in exactly the same way. A substitute good can be used in place of another. If the consumer can choose between buying one substitute good or another, she will buy the cheaper one.

# Demand in Economics

Demand Definition: In economics, demand is the quantity of a good that consumers are willing and able to purchase.

The most important determinants of demand are:

• Price of the good.
• Price of related goods.
• Disposable income.
• Consumer’s preferences.

## The Demand Curve and the Law of Demand

The demand curve is a graph that describes the relationship between price and quantity demanded.

# Economic Variables

Economic variables are measurements that describe economic units, like the GDP, Inflation or Interest Rates.

A variable is defined as a set of attributes of an object. Attributes are characteristics that describe an object. Economic variables are measurements that describe economic units, for example, a country, a government, a company or a person.

# Vertical Supply

A vertical supply represents a situation in which the offered quantity is fixed and do not changes when the price changes. The vertical supply is also called perfect inelastic supply because the variation in quantity is always zero.

Price elasticity of the supply measures the responsiveness of the quantity supplied when the price variates. It is defined by the proportional change in the quantity supplied, divided the proportional change in the price:

es = (ΔQ/Q)/(ΔP/P)

Where: