A main cause of the Great Depression was overproduction. Factories and farms were producing more goods than the people could afford to buy. ... Prices for farm products also fell, as a result, farmers could not pay off bank loans and many lost their farms due to foreclosure.
Why was overproduction a problem?
The tendency for an overproduction of commodities to lead to economic collapse is specific to the capitalist economy. ... As overproduction is the excess of production above consumption, this reduction in consumption worsens the problem.
