Q.Which of the following best captures the relationship between law and business ethics?

Legal compliance is treated as a floor, not a ceiling, on acceptable business conduct — ethics can, and often does, demand more than the bare legal minimum.

Law and business ethics overlap heavily, but they are not the same thing, and this question tests exactly that distinction.

Option (a) is incorrect because it collapses ethics into law — treating everything legal as automatically ethical ignores that law only sets a minimum, enforceable standard, while ethics can demand more. A classic example is deliberately confusing fine print in a contract: it may be entirely legal, yet still be regarded as dishonest and therefore unethical.

Option (b) is incorrect because business ethics is not narrower than law — if anything, it is broader, since it covers situations law does not explicitly regulate at all (for instance, whether to disclose a product defect that no law requires disclosing).

Option (d) is incorrect because legal compliance is only a floor, not a ceiling, on acceptable conduct — a business that merely complies with the law can still act unethically in ways the law has not anticipated or chosen to regulate.

Option (c) is correct: precisely because law and ethics are related but distinct standards, an action can be perfectly legal and still be judged unethical by the standards of honesty, fairness and integrity that business ethics applies.

Assuming legality and ethics are simply the same thing — they overlap heavily but a legally permitted action (e.g. deliberately confusing fine print) can still be judged unethical.