This factor shows the RAM of the server that is allotted to your account. Since websites are becoming complex, the corresponding code requires more RAM in order to render a webpage. If the available RAM is less, the code will require more time to deliver the page.
This parameter should be decided on the basis of expected traffic on website. If a large number of requests are expected simultaneously, the corresponding scenario would require more RAM but if the traffic is expected to be distributed evenly throughout the day, a small RAM would suffice.