Could be the caliper or the metal line. You will have to have it checked.
DOT 3
According to the 1996 Mercury Grand Marquis Owner Guide : ( DOT 3 brake fluid , meeting Ford specification ESA-M6C25-A )
Why ? Just replace it.
According to the 2001 Mercury Grand Marquis owners manual the fuse panel is below and to the left of the steering wheel , by the brake pedal , and has a cover on it
check your brake lights if they not worhing replace fuse or brake light switch
to the left of the brake pedal, mounted to the firewall.
driver's side , inside the car, near the parking brake.
change the brake lights check the fuse check the brake light swtch
The red " BRAKE " light in your dash means that either your parking brake is on or the BRAKE FLUID LEVEL in your brake master cylinder in the engine compartment is LOW
( # 16 ) is a 20 amp fuse for the cigarette lighter and OBD II in a 2007 Mercury Grand Marquis ( in the fuse panel below and to the left of the steering wheel by the brake pedal )
Remove the wing nuts from inside the trunk, the assembly will pop out.
I believe the obd port is located by the parking brake and just above it.