What is the term for the measure of responsiveness of the quantity demanded when there is a change in price?

The measure of responsiveness of the quantity demanded to a change in price is known as price elasticity of demand. This concept quantifies how sensitive consumers are to price changes; a higher elasticity indicates that consumers will significantly change the quantity they purchase in response to price changes, whereas a lower elasticity suggests that quantity demanded is less responsive to price changes.

When discussing price elasticity of demand, it is important to note that it is calculated as the percentage change in quantity demanded divided by the percentage change in price. This concept helps businesses and policymakers understand consumer behavior and make informed decisions regarding pricing strategies and economic policies.

Understanding price elasticity of demand is crucial for various applications in economics, including determining optimal pricing, anticipating shifts in market demand, and analyzing the effects of taxation on goods. The other options provided do not accurately represent this specific measure: cross price elasticity pertains to the responsiveness of demand for one good when the price of another good changes, income elasticity relates to how demand changes in response to changes in consumer income, and demand fluctuation refers more to variations in demand rather than a specific measurement of responsiveness.