It is said in microeconomics that if there is a drought and you're the only one with a few spare water bottles, and you're feeling generous, you shouldn't just hand them out to people on a first-come, first-served basis. That's because you don't know how badly each person needs water, and if you want to maximize social welfare you'll want to give the water to the people who value the water more rather than those that value it less. So the solution to this problem is to sell the water bottles for a price. That way, people will automatically choose to buy the water if the water is worth more to them than the price, and they will choose not to buy the water if the price is worth more to them than the water. So you've classified people based on how much the water is worth to them, and you've given water to those for whom it is worth the most. Microeconomic theory says that you should sell the water for a price even if you're not interested in making money; if you really don't care about the money you should just donate the sales proceeds to charity, but the imposition of a price increases social welfare. My question is, how is the right price determined? I know in the case where you have self-interested buyers and sellers, then the optimum price is the intersection of the supply and demand curves, i.e. the market clearing price. But how would you do it in this case, where the buyers are all self-interested, but the seller doesn't care about himself at all and just wants to help society? The problem is, given a bunch of buyers, each with their own demand curve for water (let's assume for simplicity that they're all linear, but have different slopes), what is the right price to charge them, given a fixed supply of water bottles? Any help would be greatly appreciated. Thank You in Advance.