It is a model of the theorem not the theorem per se since it contains simplifications, as does every model. It is intended as an aid to understanding. C is the final consumption sector. It is the totality of purchasing power flowing into the hands of consumers enabling them to purchase goods and services from Retailers. D, being effective demand flowing into retail sales.
Entrepreneurial profit is zero.
This is of course a reductio ad absurdum that describes an impossible situation. The system functions because of the availability of bank credit and export credit not deriving in reflux to the costs of production. Which means that it is consumer debt which must rise exponentially as compared to their income. Because the consumer demand curve D itself will tend to decline relative to consumer income with satiation, consumer dividends alone are not sufficient to fully compensate the gap between retail prices and purchasing power.