
As we move along line $X Y$, it cuts a isotherm at higher temperature $\left(T_2 > T_3\right)$
$\left(T_2 > T_3\right)$ but then from $Z$ to $Y$ line moves to a low temperature isotherm. So, heat is absorbed upto $Z$ and then it is released from $Z$ to $Y$.
The $P-V$ diagram that best describes this cycle is
(Diagrams are schematic and not to scale)

