First Principles of Business Law

10.2. Taking account of ethical considerations

Case study.  Suppose that, in Australia, the law allows the buyer and seller of goods to negotiate and agree on the price at which goods are bought and sold. Suppose also that, because of manufacturing difficulties, toilet paper is in short supply.  Most shops sell what they have quickly, leaving their shelves bare.  However, one shopkeeper has a large supply of toilet paper.  Because of the overall shortage, he raises the price at which he is prepared to sell from 50c per roll to $2.50 per roll. Some customers are happy to pay this price while others prefer not to buy. A refuses to sell at a lower price for as long as the shortage lasts.

In the circumstances, is A’s conduct both legal and ethical?

 (b) A’s conduct is both legal and ethical.

(a) A’s conduct is legal but not ethical.