I could swear that this appeared almost overnight, as I would have noticed it had it been around sooner. The dog is a chihuahua/terrier mix, called a rat terrier and he's about a year old. Any idea what this could be?
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It's not uncommon for dogs to scratch (or chew) off hair if they have something bothering their skin that won't go away with a single scratch. They don't have the self-restraint we do in knowing that they need to ignore the itch in order for it to heal better.
It's possibly that it started as a bug bite, or he came into contact with something he's allergic to, and he scratched it to the point where you see it now. The important thing you'll need to do now, is make sure that he doesn't keep scratching it, otherwise it won't heal.
If he can bite it, which it looks like he can, I'd suggest looking into a cone of shame. I think they're pretty inexpensive and you can find them at your local pet store.
The antibiotics should hopefully help keep the itching down, so that he won't scratch at it. There are some anti-itch sprays that you could use, but I'm not sure how well they would work in use with the antibiotics. If after you use the antibiotics you still catch him itching, it might be worth asking your vet if you can use an anti-itch treatment with the antibiotics they prescribed.