People who need life-saving drugs cannot do without them and surely will be willing to pay very high prices for them. So why can't producers of life-saving drugs charge any price that they wish?

What will be an ideal response?

The monopolist is powerful but cannot sell at a point beyond the market demand curve; a monopoly cannot set any price it wishes to because it faces a downward-sloping market demand curve. With an increase in price, the firm will sell a smaller number of units but will gain more revenue per unit sold. With a decrease in price, the number of units sold will increase but the revenue per unit will fall.