Final answer:
The responsiveness of quantity demanded of one product to the change in price of another product is called the cross-price elasticity of demand, which is positive for substitutes and negative for complements.
Step-by-step explanation:
A measure of the responsiveness of quantity demanded of one product to the change in price of another product is known as the cross-price elasticity of demand.
This concept quantifies how the demand for a good (Good A) changes in response to a price change of a related good (Good B). To calculate it, we take the percentage change in the quantity demanded of Good A and divide it by the percentage change in the price of Good B.
If the cross-price elasticity of demand is positive, it indicates that the two goods are substitutes, meaning that as the price of Good B increases, the demand for Good A also increases.
If it is negative, the two goods are complements, which means that an increase in the price of Good B will result in a decrease in the demand for Good A.
In contrast, elastic demand reflects a scenario where the demand for a product is highly sensitive to changes in its own price, not in the price of another good.