For a positive half cycle diode is a short,because anode is connected to positive voltage(positive half cycle of the input voltage) and the cathode of the diode to Vref ,which is less than the applied input voltage.
Note:works only when +Vm >> Vref
(where Vm or Vp is the peak input voltage)
Therefore Voutput=Vref
For a negative half cycle diode is a open circuit because it is reverse biased, since the circuit is incomplete no current flows through the circuit and hence there is no voltage drop across the resistor.
NOTE:works only when –Vm <<Vref
Therefore Voutput=Vinput
The above figure shows the input and output waveforms of the clipping circuit.
Since the clipped off portion is in the positive half cycle it is a positive clipper.
