Intercept of a Line

The intercept of a line is the point where it crosses an axis.

• The Y-intercept is where the line crosses the Y-axis — found by setting $x = 0$ and solving for $y$. It tells us the value of the Y-axis variable when the X-axis variable is zero.
• The X-intercept is where the line crosses the X-axis — found by setting $y = 0$ and solving for $x$. It tells us the value of the X-axis variable when the Y-axis variable is zero.

Economic meaning, for a linear demand line $P = a - bQ$ (P on the Y-axis, Q on the X-axis):

• The Y-intercept, $P = a$ (at $Q = 0$), is the highest price any buyer is willing to pay — often called the choke price: raise the price to $a$ or above and quantity demanded falls to zero.
• The X-intercept, found by setting $P = 0$, is the quantity that would be demanded if the good were free — the saturation quantity. …