How are DNA segments selected in PCR?
Note: In your PCR program you always set extension time.

Case:


Product length = 500bp
PCR extension time = 50sec
Assuming that polymerase adds 1000 nt/min


Cycle 1:


Strand that binds FP: extends ~800nt to the right (as per the polymerization rate): 300 bp ahead of RP complementary site. This product is lets say P1
Strand that binds RP: extends ~800nt to the left: 300bp ahead of FP complementary site. This is P2




Cycle 2: 

The products of cycle-1 become templates for next round. 
FP binds to P2 -300nt from its 3' end. Similarly RP binds to P1 -300nt from its 3' end.
The resultant products will be 500nt which give rise to a 500bp perfect dsDNA.



Some P1 and P2 will keep forming at a linear rate; since your template is low in amount compared to the amplified cycle1 and cycle-2 products, your expected PCR product will be much higher (which gets produced at an exponential rate).