Which economic term relates to the responsiveness of quantity demanded to changes in price?

The term that relates to the responsiveness of quantity demanded to changes in price is elasticity. Elasticity measures how much the quantity demanded of a good responds to a change in its price; it quantifies the degree of sensitivity consumers have to price fluctuations. When demand is elastic, a small change in price leads to a larger change in the quantity demanded. Conversely, if demand is inelastic, quantity demanded changes little despite price changes.

This concept is crucial for understanding market dynamics and consumer behavior, as it helps businesses and policymakers make informed decisions regarding pricing strategies and market interventions. For instance, if a product has high elasticity, lowering its price could significantly increase sales volume, while a product with low elasticity might not see much change in demand even if the price is reduced.

Other terms such as equilibrium and substitutability relate to concepts in economics but do not directly measure the sensitivity of demand to price changes. Equilibrium refers to the point at which supply equals demand, and substitutability concerns how easily consumers can switch from one good to another. Inelasticity, while related to elasticity, specifically describes situations where demand is unresponsive to price changes and does not capture the broader concept of responsiveness quantified by elasticity.