Final answer:
The price elasticity of demand for a product 'm' can be influenced by the availability of substitutes and the proportion of income spent on the product. Numerous substitutes make demand more elastic, while a higher cost share of income leads to greater sensitivity to price changes.
Step-by-step explanation:
Two factors that could influence the price elasticity of demand for a product, referred to here as 'm', are the availability of substitutes and the proportion of income spent on the product. If there are many substitutes available for 'm', customers can easily switch to these alternatives if the price of 'm' goes up, which means that the demand for 'm' is more elastic. Conversely, if 'm' has no close substitutes, the demand is likely to be inelastic.
Additionally, if customers spend a large proportion of their income on 'm', they are more sensitive to price changes, leading to higher elasticity. In contrast, if 'm' represents a small portion of their spending, they might not decrease their quantity demanded as much when the price rises, indicating inelastic demand. Understanding these aspects helps companies strategize on pricing and marketing for their goods or services.