Short Run

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The period of time in which at least one factor of production is fixed. All production takes places here

 Example:

1. Ice Cream Stand
2. Lawn Mowing Company

Long Run

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The period of time in which all factors of production are variable, but the state of technology is fixed. All planning takes place here.

 Example:

1. Power Plant
2. Car Companies

Fixed Factors

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An input that cannot be increased in supply within a given time period.

Example:

1. Number of machines
2. Number of laborers

Variable Factors

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An input that can be increased in supply within a given time period.

Example:

1. Hours that labors work
2. Hours that machines work

Law of Diminishing Returns

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Point beyond which the extra output from additional units of the variable factor will diminish. 

Example:

1. Burger Hut- Limited amount of space
2. Printing Company- Limited speed of machines