The horn of the rhinoceros is prized in Japan and China for its alleged aphrodisiac properties. This has proved to be most unfortunate for the rhinoceroses of East Africa. Although it is illegal to kill rhinoceroses in the game parks of Kenya, the rhinoceros population of these parks has been almost totally depleted by poachers. The price of rhinoceros horns in recent years has risen so high that a poacher can earn half a year’s wages by simply killing one rhinoceros. Such high rewards for poaching have made laws against poaching almost impossible to enforce in East Africa. There are also large game parks with rhinoceros populations in South Africa. Game wardens there were able to prevent poaching almost completely and the rhinoceros population of South Africa has prospered. In a recent program from the television series Nova, a South African game warden explained that some rhinoceroses even have to be “harvested” in order to prevent overpopulation of rhinoceroses. “What then,” asked the interviewer, “do you do with the horns from the animals that are harvested or that die of natural causes?” The South African game warden proudly explained that since international trade in rhinoceros horns was illegal, South Africa did not contribute to international crime by selling these horns. Instead the horns were either destroyed or stored in a warehouse.
(a) Suppose that all of the rhinoceros horns produced in South Africa are destroyed. Label the axes below and draw world supply and demand curves for rhinoceros horns with blue ink. Label the equilibrium price and quantity.
(b) If South Africa were to sell its rhinoceros horns on the world market, which of the curves in your diagram would shift and in what direction? Supply curve to the right. Use red ink to illustrate the shifted curve or curves. If South Africa were to do this, would world consumption of rhinoceros horns be increased or decreased? Increased. Would the world price of rhinoceros horns be increased or decreased? Decreased. Would the amount of rhinoceros poaching be increased or decreased? Decreased.