What is the likely outcome if a natural monopoly is required by government regulation to set its price equal to marginal cost?

Explanation

If a natural monopoly must price its product at marginal cost, it will not cover its total costs, leading to losses that eventually push the firm out of the market. Therefore, the monopolist is likely to exit. Other options are incorrect because pricing at marginal cost in a natural monopoly typically results in financial losses rather than increased efficiency, higher prices, or new market entrants.