The potential energy (PE) of the activated complex is higher than that of the reactants, as the activated complex requires additional energy to be formed. This higher activation energy is necessary for the reaction to proceed, influencing whether the reaction is exothermic or endothermic. An exothermic reaction occurs when the PE of the reactants is greater than that of the products, while an endothermic reaction has the opposite relationship. Some participants mistakenly connect activation energy directly to thermicity, which is not accurate. Understanding the relationship between activation energy and potential energy is crucial for grasping reaction dynamics.