Which of the following is an accurate statement about the relationship between firm effects and industry effects?
A. Firm effects deal with the action of competitors; industry effects deal with internal circumstances.
B. Firm effects deal with a manager's actions; industry effects deal with external circumstances.
C. Firm effects deal with a manager's actions; industry effects deal with internal circumstances.
D. Firm effects deal with the action of competitors; industry effects deal with external circumstances.
Answer: B. Firm effects deal with a manager's actions; industry effects deal with external circumstances.