I have updated android studio with latest version and then after googling I also updated Android SDK with API 18 but still it gives the same error.
Change
compileSdkVersion 18 minSdkVersion 10 targetSdkVersion 18
in build.gradle in your app directory/module
Or Download Latest API Version
Just click on the link written in the error:
Open Android SDK Manager
and it will show you the dialogs that will help you to install the required sdk for your project.
I had similar issue. I updated android studio build tools and my project didn't find "android-22". I looked in android sdk manager and it was installed.
To fix this issue I uninstalled "android-22" and installed again.
Open project.properties file and change the line with target=android-22 to the desired value.
For example:
target=android-19