In the context of price elasticity in drug markets, which statement is most accurate?

• A. Demand decreases proportionally with price increases
• B. Demand increases as price increases
• C. Demand remains largely unchanged when price changes
• D. Demand becomes zero when price rises

Answer: (C)

Price elasticity of demand measures how much the quantity demanded changes when price changes. In drug markets, demand is often inelastic, meaning price changes produce only small changes in how much people buy. This happens because addiction creates a strong need, there are few close substitutes, and withdrawal or health concerns push people to continue purchasing despite higher prices. So, demand remains largely unchanged when price changes.

The other ideas conflict with how people actually respond in these markets: demand doesn’t rise just because price rises, and it’s unlikely to drop to zero with a price increase.