There is a short story contest where the limit is five hundred (500) words and I want to know if that is a possible limit for a short story?
Even shorter stories are possible. Check out https://twitter.com/microsff for Micro Sci-Fi & Fantasy stories that fit in either a single tweet or occasionally a thread.
Easily. There are entire categories of "flash fiction" that are even shorter, even down to just six words (famous example allegedly by Hemingway: "For sale: Baby shoes. Never worn."). Common breakpoints are Twitter sized (280 characters), 50 words, 100 words, 300 words, 500 words, 750 words, and 1000 words. These categories go by many names, and they aren't really standard, but common names are dribble, microfiction, micro-story, flash fiction, minisaga, sudden fiction, and so on. Beyond 1000 words you start to get into established novelette territory and more traditional short stories.
In "150+ Short Two-Sentence Horror Stories To Freak You Out," Michael Koh compiled a list of two-sentence horror stories.
He started of by saying that "horror stories don’t need to be long in order to be scary. A good horror concept can always be boiled down to its chilling core."
Here are a few examples:
I can’t move, breathe, speak or hear and it’s so dark all the time. If I knew it would be this lonely, I would have been cremated instead.
I woke up to hear knocking on glass. At first, I thought it was the window until I heard it come from the mirror again.
There was a picture in my phone of me sleeping. I live alone.
My wife woke me up last night to tell me there was an intruder in our house. She was murdered by an intruder 2 years ago.
The point is that you can express the core of an idea in a very short amount of space. Writing more just expands on it. So, it's quite possible to write a short story in only 500 words; it just depends on how quickly you can say what you need to say.
There also a very popular writing competition run by the BBC every year for young writers called "500 words". Some of the stories that have come out of that are very impressive, especially since the competition is only open to kids aged 5 to 13!
Somebody who used the (very) short form as a congenial tool is the German Marxist poet Bertolt Brecht, known for the Three Penny Opera. He wrote a series of very short stories (link in German) about a fictional character Mr. Keuner.
Maybe a little background is in order to appreciate these stories. In very short stories much must be left to the reader's imagination because there is no room to flesh it out. This fit well with one of Brecht's political-poetic core principles. His goal was to provoke his audience into thinking for themselves, instead of passively accepting given stories, in the news as well as in the arts. His strategy was alienation: A story would not provide closure; or contain other unusual elements which would interrupt any "reception trance" in the audience. These stories are examples for his method.
I'll translate one of the more famous stories:
A man who hadn't seen Mr. K in a long time greeted him with the words: "You haven't change one bit!" – "Oh!" said Mr. K. and paled.
Generations of students have wondered in their interpretations why Mr. K was put off by this remark; Brecht achieved his goal.
I think "yes", but it also depends on to what extent the author and the audience have shared experiences / thoughts, i.e. how much you can predict they assume / read between the lines. Sometimes you could do with a lot less that 500
Think of the Japanese haiku; while maybe not be a real short story, even a haiku can include some drama between the start, middle, and end.
Certainly. I have written short stories of length fifty (50) and even six (6) words. So in my humble opinion, yes it most definitely can be done.
However, it takes practice and application to write stories successfully at any given length. When I wrote stories of exactly fifty words, initially it was easy to overshot and lots of editing and re-editing was required to get them to the right length. After a few attempts, it became moderately easy to write to required length.
If you are doing this for the first time, keep trying and do lots of editing, and eventually you find the stories fall out at the right length. Good luck with the competition!