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The "perfect" engine would have an extremely high combustion temperature. Pure oxygen with pure fuel, all mixed homogenously, compressed to as close as can be to a solid state, and all lit at the exact same time in a perfectly insulated chamber where the walls absorb zero heat.
But modern engines are all about compromises since such and engine cannot exist. Finding happy mediums is what it's all about. Too rich and you're losing fuel. Too lean, and even if you burn up every last hydrocarbon you'd still be losing efficiency as combusiton temps go down from a leaner and leaner fuel mixture.
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