Final answer:
The small oval notation (D) in an E-R diagram means that the entity is optional and a relationship need not have an entity of that type.
Step-by-step explanation:
In an E-R diagram, the notation that means an entity is optional and a relationship need not have an entity of that type is the small oval (D).
This notation is used to represent a weak entity or an optional participation in the relationship. For example, if we have an E-R diagram representing a company's employees and projects, the weak entity could be a dependent, and the small oval notation would indicate that not all employees have dependents.