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Can losses in transmission cause reduction in torque and power transmitted. Losses meaning both frictional as well as inertial losses due to rotating parts in gear box. </div></BLOCKQUOTE>

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You have partly argued the right way, but came to the wrong conclusion.

What interests you is the torque at the wheels. Torque at the wheels accelerates your car and the traction of your wheel...

Regarding the engine questions i think its much more demonstrative to look at the formulas.

Derived from the first law of thermodynamics an engines Power can be calculated as:
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