The market mechanism works through the interaction between supply and demand. In economics, this interaction is taught through comparative static analysis which does not really capture the dynamics involved in the market place. In this paper, we have developed a series of system dynamics models to represent the dynamics of such interactions. We start with a simple model which is dynamically richer than the model presented to the students in classical economics text books. Then we identify the simplified assumptions made in the simple model and then gradually relax them one by one in the next models to make the models more realistic. As the assumptions are relaxed, the dynamic complexity increases and students can gradually get deeper and richer understanding of the dynamics of interactions between supply and demand in the market place. We put the whole sequence of the models on a micro-world to make a learning environment that teaches the concepts to students through using the environment on a computer in an interactive ways. We then run some experiences to examine the effectiveness of the learning environment to develop the capabilities of users to understand and explain the dynamics of supply and demand in some real world situations. The experiences show that our learning environment is very effective.