1-With demand D1 and supply S1 of hotel and motel rooms, before the evacuees arrived in Melbourne, market equilibrium price for rooms, and market equilibrium quantity of rooms there would have been:

P*4 and Q*4

P*3 and Q*3

P*1 and Q*1

P*2 and Q*2

2-The influx of evacuees caused:

an increase in demand for rooms, D1 to D2.

an increase in supply of rooms, Q*1 to Q*3.

an increase in the quantity demanded for rooms, D2 to D1.

an increase in supply of rooms, S1 to S2.

3-Before the price changed, the initial impact of this would have caused:

A Market surplus

a decrease in the market price of food.

a market shortage

a change in quantity demanded

4- As a result, the equilibrium price will change to:

P*3

P*4

P*1

P*2

5- The new equilibrium quantity will be:

Q*3

Q*1

Q*2

Q*4