In a free market system, price control can include both a price floor and a:

• A. price subsidy
• B. price ceiling
• C. price discrimination
• D. price equilibrium

Answer: (B)

Verified step by step guidance

1. Understand the concept of price control in a free market system, which refers to government-imposed limits on the prices that can be charged for goods and services.
2. Recognize that a price floor is a minimum price set above the equilibrium price to prevent prices from falling too low, such as minimum wage laws.
3. Identify that a price ceiling is a maximum price set below the equilibrium price to prevent prices from rising too high, such as rent control.
4. Note that price subsidies involve government payments to producers or consumers to lower the effective price, but are not a form of direct price control like floors or ceilings.
5. Conclude that the two main types of direct price controls are price floors and price ceilings, making 'price ceiling' the correct complement to a price floor.