Abstract for: Modeling supply, demand, and elasticity

There is a long history of interaction between economists and system dynamicists (Nordhaus 1973, Forrester et. al. 1974, Radzicki 2003). System dynamics models frequently include a representation of supply and demand, based upon classic economic theory, in order to fully capture the dynamics of a system. There are practical ways to include supply and demand in models (Mass 1976) using features in commonly used system dynamics software (Mashayeki 2006, Lyneis 2003). Unfortunately, commonly used terms often take on unintended meanings over time that do not hold true to the original definition. This is common for the terms supply and demand, especially in the media and system dynamics models. Here we attempt to clarify some of the concepts and clearly define techniques to address supply and demand, and elasticity.