Read the following passage and answer the questions.

Suppose there is a market consisting of identical firms producing the same quality of salt.

Suppose the market demand curve and the market supply curve for salt are given by:

$Q_D=350-p$ for $0 ≤ p ≤ 350$

= 0 for p > 350

$Q_S = 220 + p$ for $p ≥ 10$

= 0 for 0 ≤ p < 10

Where $Q_D$ and $Q_S$ denote the demand for and supply of salt (in kg) respectively and p denotes the price of salt per kg in rupees.

If the demand for salt increases supply remains the same and the new demand curve is $Q_D = 400-p$. What will be the new equilibrium price?

Rs 90

The correct answer is Option (1) → Rs 90 

New Demand is  $Q_D'$ = 400−p

Supply (Unchanged): $Q_S = 220 + p$

At equilibrium, $Q_D'$ = $Q_S$

400 - p = 220 + p

2p =400-220

p = 90

Substitute p=90p into either equation:

$Q_D'$​=400−90=310 (or $Q_S$=220+90=310 same result)

Equilibrium Price = Rs 90
Equilibrium Quantity = 310 units

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