In view of the demand response (DR) is a key factor that affects the comprehensive economics of the power system time series production model. From the perspective of power system production simulation, the load is divided into residential load and industrial load, and their respective roles and values in demand response are analyzed. Based on the current demand response subsidy policies formulated by some provinces in China, the optimal proportioning method of industrial load and residential load in demand response is established. Taking the long -term target year of a province in eastern China as a scenario, a time-series production simulation of the province’s power system is conducted with the goal of economy. The results show that the proposed method can effectively reduce the subsidy cost of demand response,which provides a powerful analysis tool to The operation simulation problem of the power system with DR.