Textbooks are a great example of something that is overpriced because of government subsidies. The kids who use the books don't pay for them, if they did then they wouldn't cost so much. A textbook like a school uses usually cost like $80 or more, if everyone bought them themselves and there was a free market for textbooks they would be priced more along the line of things like notebooks and pencils which are incredibly cheap.

My example is about the US, if you have a great example from another country I would be interested but it may not apply here.