How much should a Drupal Website cost?

Depends on the complexity of the modules and the website. Charge by the hour.

How much is a fair rate? Setting up the drupal site takes minutes.

Oh, you're just setting up the site? Not designing it or anything?

yes, just setting up and possibly building custom modules as needed.

I would typically charge a flat fee based on my assumption of how long the project would take.

number of hours job should take (with agreed upon functionality) x your favored hourly rate (I typically charge between 30-40 dollars an hour) = flat rate.

Of course, if the client decides to add functionality, that's going to possibly effect the bottom line. Good luck!

Setting up the website will probably be the quick part of the equation.

After you set it up, the client will likely have questions and additional requests.

I’d say, charge 2 hours worth of work, flat rate, for the setup (including any questions and tweaks), then develop modules/addons at an hourly rate.