How did overproduction made the economy worse?

Overproduction led to an excess supply of goods that outstripped consumer demand, causing prices to plummet. This decline in prices resulted in reduced revenues for businesses, leading to layoffs and increased unemployment. As more people lost their jobs, consumer spending further decreased, creating a vicious cycle of economic decline. Ultimately, this imbalance contributed to financial instability and deepened economic recessions, such as the Great Depression.