A S = MSC Price F G B C - - - - L D - - - M D = MSB E Q1 Q2 Quantity O Firms are over-producing at Q1 and under-producing at Q2 O Firms are under-producing at Q1 and the market price is at B O Firms are under-producing at Q1 and over-producing at Q2 O Firms are over-producing at Q2 and the market price is at D