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Partial and general functions of the drug market in Iran has so far been left unknown. This essay intends to reveal and analyze some of these functions. Institutional factors, particularly those that determine income distribution, from one hand and, those that cause social conflicts on the other, can be considered as main political economy factors. With regard to consumption, and more 'clearly, to high level of consumption, price mechanism has especial, and important influences. But consumpting the drug, by itseif, is not determined merely by the price. According to our research, the real price of opium has decre are during the 17 years of the study, but this has only helped to comunption / demand. Beside, consirmption of drug has been stemmed from poverty, discrimination, unemployment very shortage of recreational facilities and welfare, social conflict, and in some limited cases, due to the high in come of minorities or as an artificial energy motivating instrament for some professions. Despite the real price reduction and risk of seizure and capital punishments in various activities of drug business, its supply has been profitable. The reason is that the great tvaffickers can transfer it into European countries and take a dramatic in come from the huge unemployed and poor addict people. But these nudy people, specially the yauth can take adrantage. in all airmentances in farour ofthwir necessery subutances . We haue come to conclusion in our essay that simpliified supply and demand mechanism absolutely can not explain the couse ofperisitant drag abuse ( specialy opium and then heroin) in Iran. Factors and institutions that are active in reaction to poverty, unemployment and discrimination aer more important in this field. Profit making plus conation of course are playing a mainrole in trafficking as well as in whole sailing. The fact that a considerable part of addicts are simultaneously street distiributors have caused the supply go forward into capillary hair of drag stribution . Definitely the poverty and unemployment can not explain whole aspects of drag addiction. In fact social shortcomings, looking more stimulants for mark and eaxtra ordinary easy money making induce drag demands. Total number of serious drag addicts in Iran in quite high ( 1.3 million ) and there exis nearly 0.8 million semi addicts that become serious addiction very soon. Als between 1-4 million accidental / intertaiment users are reported itowever drag addiction and total amount of opium and herion consumption is quite high in Iran . Tetal amount of value added of drug transit ftom western borders of Iran to Europe is nearly billion $ 16. All these factors and' mechanisms, are based on internap heavy consumtion and profitable supply, whereas both are under inftuenceofsome other complicated social issues.