Answer and discuss the following questions about elasticity measures:
1-) The short-run price elasticity of demand for oil is 0.3. If new discoveries of oil increase the quantity of oil by 6 percent, what will be the resulting change in the price of oil?
2-) As a brand manager for Honey Bunches of Oats cereal, you propose lowering the price by 4 percent. What will you tell your supervisor about what you expect will be the impact on sales in the short run and in the long run? Please explain your answer when answering to make it easier to assume that your competitors do not change their prices.