We consider a production economy with many indivisible goods and one perfec
tly divisible good. The aim of the paper is to provide some light on the re
asons for which equilibrium exists for such an economy. It turns out, that
a main reason for the existence is that supplies and demands of indivisible
goods should be sets of a class of discrete convexity. The class of genera
lized polymatroids provides one of the most interesting classes of discrete
convexity. (C) 2001 Published by Elsevier Science B.V.