Yes.   A’s conduct is legal but not ethical. Let’s consider why.

Legal.  It would appear that A’s conduct is legal.  The law, as stated in the case study, does allow a buyer and seller of goods the freedom to negotiate and agree on the terms of their agreement, including the price for goods sold.  This rule of law is based on certain assumptions that may or may not be true, for example, that a buyer and seller have roughly equal negotiating power, and that normal market forces prevail.  But, stated as it is, the rule applies whether or not these assumptions are true.  It is a general rule that does not provide for exceptional situations.  So, the law will apply even when, as in this case, the seller has the upper hand and can demand high prices.  Generally, in a free market economy, governments prefer to let market forces determine the price at which goods are bought and sold rather than trying to control prices. 

Ethical.  Ethical considerations are different.  It is contrary to good conscience for a seller of non-luxury goods to take advantage of unusual circumstances that allow them to dictate prices.  The shortage of supplies, together with the lack of competition between sellers, has given the seller disproportionate power.  While the law allows a seller to demand a high price for their goods, ethics requires that they should not take advantage of the power the temporary situation has handed them.  Good conscience requires that they continue to sell their toilet rolls at the normal price.