ASK A QUESTION Que lástima or que pena?
Seems like both of these terms mean "What a pity", so what's the better one to use'
Better for what? All languages have more than one way to say the same thing, and often one alternative is not necessarily better than another. I can see no significant difference between both alternatives, although I personally probably use "pena" more.
What would be a good response to "que lastima"?
Qué lástima! What a pity!
Qué pena! What a shame!
When meaning 'compasión' they are almost the same, maybe even interchangeable. However 'pena' has other connotations that 'lástima' doesn't have:
It can be a 'punishment', it can be a 'difficulty' and in several countries in Latin America it means 'embarrassment'.
A reply? depends really on what is a shame - if it's some-thing that's happened to a person you could say 'pobrecita/o'