Consider a natural monopoly with the total cost function AC(Q) = F + cQ, where F > 0, c > 0. Suppose that the value of fixed cost F increases to F1 > F. Explain how this change affects (increase/decrease/no change) the optimal monopoly price p and quantity Q if:

a) the monopoly is regulated to achieve the maximum social welfare with subsidies.

b) the monopoly is regulated to achieve the maximum social welfare without subsidies.