- A positive result means that the two goods are substitute goods, so the price of one good rises then the demand of the other good also rises and vice versa. These goods tend to be bought instead of each other.
- A negative result means that the two goods are complimentary goods. Meaning if the price of one good rises then demand for the other will fall and vice versa. The two goods are normally bought together.
- If the result is 0 it means there is no relationship between the two goods.
An example is in need i think. So, say the price of Audi cars increased by 10%, which caused a demand increase for BMW cars of 15%. Lets work this out...
XED = 15% ÷ 10% = 1.5
Thus, with this answer we can see that these two goods are substitute goods (positive value), and quite close substitutes at that because the figure is fairly high.
Short but sweet, that's the basics. Thanks!