Final answer:
The short-run is defined as the period during which businesses operate with at least one fixed factor of production, such as physical capital. This limitation prevents firms from adjusting all production factors freely.
Step-by-step explanation:
The short-run can be defined as that time frame when there are fixed inputs that a firm cannot change. It is a period during which at least one of the factors of production is fixed in quantity. In this context, fixed inputs typically refer to physical capital, like buildings or machinery, which cannot be easily or quickly changed. For example, a pizza restaurant with a fixed lease is operating in the short run because it is limited to using the current building; the owner can't move to a larger or smaller space without renegotiating the lease or waiting for it to expire.
In economic terms, L represents the variable inputs, such as labor, that firms can adjust in the short run, while K represents the fixed inputs, such as capital, which are only adjustable in the long run. This is a fundamental concept in economics when discussing production and the time horizon for business decisions.