When a p-n junction diode is observed to have a significantly reduced depletion layer width and a lowered potential barrier compared to its equilibrium state, the diode is:

Step-by-step solution

When a p-n junction is forward biased, the applied external voltage opposes the built-in potential barrier. This pushes the majority charge carriers towards the junction, which reduces the width of the depletion layer and lowers the effective potential barrier. In reverse bias, the depletion width increases. An unbiased diode remains in its equilibrium state. Breakdown voltage is typically associated with a high reverse bias. Answer: forward biased