What is the primary benefit of using prompt caching in the Claude API?
Select an answer to reveal the explanation.
Short Explanation and Infographic
Prompt caching is like pre-loading a long document into memory once and reading it for free for every question. You pay the full price once, then get a big discount on cache hits.
Full explanation below image
Full Explanation
Claude's prompt caching feature lets developers cache frequently-used prompt prefixes (like a long system prompt, a large document, or a big code file). After the first call that creates the cache, subsequent calls that use the same prefix get a significant discount on input token pricing and reduced latency. Cache entries last for a defined period (e.g., 5 minutes, extendable). Option A is wrong — caching is per-prefix for cost/performance, not cross-user memory. Option C describes response caching at the application layer, a different concept. Option D is wrong — caching doesn't compress content.