The correct answer is option 'D', which states that market activity known as production is for exchange, earning income, and earning profit. This means that production in the market serves multiple purposes and has various outcomes. Let's explore each of these factors in detail:

1. Exchange:
Production is primarily carried out to create goods and services that can be exchanged in the market. When producers manufacture products or provide services, they do so with the intention of selling them to consumers. This exchange allows both parties to benefit - consumers acquire the goods or services they need, while producers generate revenue.

2. Earning Income:
Production is a key means for individuals and businesses to earn income. By engaging in productive activities, individuals contribute to the economy and are compensated for their efforts. For example, workers earn wages or salaries for their labor, while entrepreneurs earn profits for taking risks and organizing production.

3. Earning Profit:
Profit is one of the main incentives for engaging in production. When producers successfully sell their goods or services in the market, they aim to generate a profit. Profit is the difference between the total revenue earned from sales and the costs incurred in production. It serves as a reward for the risks taken, investment made, and the efficiency or innovation demonstrated by producers.

Therefore, production is driven by the desire to exchange goods and services, earn income through wages or profits, and create value in the market. These factors are interconnected and mutually reinforcing. By producing for exchange, individuals and businesses can earn income, and by earning income and profit, they are motivated to continue producing. This cycle of production, exchange, and income generation forms the basis of market activity and economic growth.