What feature allows applications to utilize cloud resources during peak demand?

Cloud bursting is the correct answer because it refers to the ability to utilize additional cloud resources when local resources are insufficient to meet heightened demand. This feature is essential for applications that experience variable loads and can quickly scale up by using the cloud during peak times without the need for permanent infrastructure expansion.

For example, a company might have its primary data center that handles regular workloads, but during high traffic events (like a sales promotion or holiday season), it can "burst" into a cloud environment to handle excess traffic. This flexibility not only improves the application's performance but also helps maintain cost-effectiveness by paying for the additional resources only when necessary.

In contrast, load balancing distributes traffic across multiple servers to enhance performance and availability but does not specifically address scaling beyond existing capacity. Dedicated hosting involves having dedicated resources and is less flexible for managing peaks in demand due to its fixed nature. High availability clustering focuses on ensuring that services remain operational in case one server fails, rather than dynamically scaling based on demand.