In the short run, a firm can increase its variable factor of production and increase labour. This can be achieved by hiring more staff, extending the working day, which means overtime hours, or using more raw materials.

However, by having more materials, it becomes difficult to source if there is unanticipated and unprecedented demand for the materials. There may also be supply chain issues.

Extending the working day for existing firms may be feasible if there is already excess capacity that can be utilized. If a firm was already operating at full capacity, i.e. 24 hour operations, it is not possible to expand production.

Finding more workers depends on the labour market conditions. In the case of the pandemic, restrictions are likely to be a prevailing factor at the time. If there are unemployed workers with suitable skills, additional workers may be hired if they are willing to work at the prevailing wage.

However, if the labour market has a limited slack or there are many unemployed workers who are self-isolating, this could be challenging. Assuming that it is possible to introduce more labour, diminishing returns sets in and total output increases at a decreasing rate over time.

In the long run, if a firm wishes to expand its production capacity, it needs to grow its fixed factors of production such as premises and capital equipment e.g. buildings and machinery. This is likely to require investment which the firm needs to secure, and they may not be in the financial position to acquire the necessary funds. Even with the funds, there is a significant lead time on acquiring the new premises and machinery. This limits the firm’s growth in the medium or even the long term.