Grando plc's price increase as a result of compliance costs is an example of what?

The situation described regarding Grando plc's price increase due to compliance costs is best understood as an example of mere compliance. This term refers to a scenario where an entity incurs additional costs to meet regulatory requirements or standards, which can subsequently lead to increased prices for consumers.

In this context, when Grando plc faced compliance costs—possibly from new legislation, safety and environmental regulations, or quality standards—it had to reflect those additional costs in its pricing strategy to maintain profitability. The passing of compliance costs onto customers is a common practice in business, reflecting an adjustment to operating expenses that businesses must account for.

Mere compliance does not imply any unethical behavior or exploitation of customers; instead, it reflects the straightforward consequence of adhering to the legal or regulatory framework within which the business operates. This concept illustrates how external factors, such as compliance with laws, can impact pricing, reinforcing the necessity for businesses to effectively manage costs while remaining compliant.

The other choices, while interesting concepts related to pricing strategies, don't accurately characterize basic compliance scenarios, where cost increases are directly linked to meeting necessary legal requirements rather than opportunistic or strategic business maneuvers.