Question

Why did overproduction - making more goods than consumers could afford to buy - eventually cause
business profits to decline during the Great Depression?
(1 point)
Businesses had to pay their workers higher wages.
Consumers could not afford to buy the excess goods.
Foreign countries stopped buying American-made goods.
The government placed higher taxes on all products.

Answer 1

Consumers could not afford to buy the excess goods.

Because factories produced more than people could purchase, inventories piled up, producers cut prices or cut back production and laid off workers, which reduced demand further and caused profits to fall.