Loss in social welfare with quantity, prices and costs

When pharmaceutical manufacturers conspire to generate only Q₁ penicillin, in that case the: (i) purely-competitive firms which produced penicillin would experience economic losses. (ii) resulting excessive antibiotic treatments would produce strains of drug-resistant diseases. (iii) marginal social benefits of penicillin would exceed the marginal social costs. (iv) loss in social welfare would approximately equivalent the area of triangle bdg. (v) marginal social costs of penicillin would exceed the marginal social benefits.

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