Final answer:
Rental rates in a college town can be influenced by the student population as it increases the demand for housing, potentially leading to higher rental prices if the housing supply remains unchanged.
Step-by-step explanation:
Rental rates in a college town can be influenced by the student population, which increases demand for housing. When the student population in a college town grows, it creates a shift in the demand curve for rental housing to the right. This change illustrates a basic principle of economics: as demand increases (perhaps due to a higher student population), if supply remains constant, the price of rental units is likely to go up. This concept is depicted in economic models, such as the one where the original equilibrium price of rental housing is set at an equilibrium quantity, and any increase in demand, like from a growing student population, would lead to a higher equilibrium price and quantity.
The dynamics of the housing market in college towns are complex and subject to various factors including local rent control laws, availability of housing, and the overall economy. However, generally speaking, an influx of students can lead to higher rental prices, as landlords and property managers respond to increased demand. This situation underscores the relevance of housing affordability and rent control debates in areas with significant student populations.