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You need to look at it as area under the power curve. While the engine may make peak power at a certain RPM, going over that RPM will still give you more average power when compared to the alternative of shifting to a higher gear and revving at a lower RPM. This is also the reason that when tuning a car, you may want to go for a fatter torque curve that delivers less peak power rather than choosing a more peaky torque curve that delivers more peak power. Because when you average out the power that the engine is producing throughout your run, having a fatter torque curve is often better for delivering the most average power output.
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