As long as economic profit is positive, Joe is better off running his own business. Once economic profit goes negative, Joe would be better off at his old job. Any resource that can be varied in the short run to increase or decrease the level of output. Examples are labor, materials, etc. Any resource that can t be varied in the short run.
Example is size of the building.
Short Run an economic period where at least one resource is fixed. Long Run an economic period where no resource is fixed. When MP is increasing, the firm is experiencing increasing marginal returns. The return from each additional unit of resource is contributing to total production. When MP is decreasing, the firm is experiencing diminishing marginal returns.