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ECONOMIC SUPPLY & DEMAND - MIT OpenCourseWare

D-4388 1 ECONOMIC SUPPLY & DEMAND by Joseph Whelan Kamil Msefer Prepared for the MIT System Dynamics in Education Project Under the Supervision of Professor Jay W. Forrester January 14, 1996 Copyright 1994 by MIT Permission granted to copy for non-commercial educational purposes 5 D-4388 3 Table of Contents 1. ABSTRACT 4 2. INTRODUCTION3. CONVENTIONAL SUPPLY AND DEMAND INTRODUCTION 6 DEMAND 6 SUPPLY 8 INTERACTION BETWEEN SUPPLY AND DEMAND 9 4. A SYSTEM DYNAMICS APPROACH TO SUPPLY AND DEMAND 12 INTRODUCTION 12 DEMAND 13 SUPPLY 15 INTERACTION BETWEEN SUPPLY AND DEMAND 18 5. TESTING THE MODEL 20 INCREASE IN DEMAND 21 DESIRED INVENTORY COVERAGE 23 PRICE CHANGE DELAY 24 FURTHER EXPLORATION 26 6. SOLUTIONS TO EXERCISES 27 INCREASE IN DEMAND 27 DESIRED INVENTORY COVERAGE 29 PRICE CHANGE DELAY 30 7.

This paper introduces a model that incorporates elements from classical economics as well as several real-world assumptions. This model will be used to examine some of the interactions among supply, demand and price. 1 Supply and production are very similar terms and are often used interchangeably. 2Low, Gilbert W. (1974). Supply and Demand in ...

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