We use models in an attempt to explain or predict outcomes.

A model simplifies the relationship between various economic factors. This simplification of the complex interactions between individuals, groups and institutions relies on the ceteris paribus assumption. In other words, other things being equal or unchanged.

The simulation allows the modeller to calculate the cross price elasticity of demand using their own quantity and price settings.

You can download an Excel version of the original spreadsheet (Excel 97, 16K)

The model settings for the inputs are;

• Initial Price of Good X (£): 0 to 100
• Initial Quantity of Good Y (Q): 0 to 100
• Final Price of Good X (£): 0 to 100
• Final Quantity of Good Y (Q): 0 to 100
• Price of Good Y (£): 0 to 10

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