When new firms enter a market, the number of firms rise and the supply curve shifts to the right (supply increases, equilibrium quantity increases and the equilibrium price falls). New firms continue to enter the market until positive economic profits are eliminated, which means that they keep entering the market till their economic profits fall to zero. When firms exit a market, the supply decreases and the supply curve shifts to the left (equilibrium quantity falls and equilibrium price rises). Firms continue to exit until economic loss is eliminated. The correct answer is D.