A positive cross price elasticity denotes that the two goods are substitutes. For example, if a price of one good increases, the demand for it’s rival product will increase. As you can see from the diagram above, when the price of Coca Cola increases, the demand for pepsi will also increase as pepsi is a substitute for coca cola and people would choose a cheaper and more affordable good.
When two products are complements, the cross price elasticity will be negative. As the price of one good increases, the demand for it’s complement will decrease. For example, as you can see from the diagram, when the price of popcorn increases, the demand for soft drinks decreases. Popcorn is very affordable but is sold at a much higher price. Thus, the sales of popcorn is more than enough to compensate for the low sales of soft drinks. Complements can also be elastic and inelastic. An elastic complement will be a close complement whereas an inelastic one will be a not so close complement.