You are thinking of a kassam. A grad is more expensive. An interceptor currently costs about 50K. Less than 10% of projectiles from Gaza hit built up areas, and Israel only needs to shoot at those. So the economics are better than they appear at first glance.
Donald Trump: Israeli settlement construction in West Bank should 'keep going' (Haaretz)
from the article: Iron Dome successfully intercepts Gaza rocket for first time