In order to answer the question a couple of basic concepts in Quantum mechanics (QM) have to be used.
The comparison of a eigenvalue problem of Linear Algebra (LA) and the one of QM is conceptionally possible, but mathematically rather difficult.
In QM one deals with operators as is also the position operator which act on elements of a Hilbert space of (in most cases) infinite dimension. This requires knowledge of Functional analysis (FA). A further complication is that the position operator is a unbounded operator on which most theorems of FA do not apply. For instance we will find that the eigenfunctions of the position operator are actually not part of a Hilbert space.
Nevertheless an analogy is possible.
In LA there is only a finite number of eigenvalues possible because it deals with a finite-dimensional space.
If in QM one acts with an operator on any wavefunction, we do not know the outcome of the measurement. But if the operator acts on an eigenstate of a certain value $\lambda$ being part of the spectrum of that operator, we know that the measurement result will be $\lambda$.
$$\hat{O} \Psi_\lambda = \lambda \Psi_\lambda$$
A wavefunction which is not an eigenfunction of a particular position is considered in QM as a linear combination of all possible eigenfunctions of the position operator.
As the possible values of the position operator are of infinite number (and even uncountable) this linear combination is a priori an infinite sum over an uncountable number of possibilities which will turn out as an integral (see more below).
The measurement process is a arbitrary projection of a wavefunction on one of the eigenfunctions --- also called eigenstate -- of the position operator. But if the measurement process is quickly enough repeated after the first measurement the measurement will reproduce the same eigenvalue as measured before -- i.e. in that moment we are in an eigenstate. That is also valid for the position operator.
Then we can write $\hat{x}\Psi_{x0}(x) = x_0 \Psi_{x0}(x)$.
What are the eigenfunctions of the position operator ?
These are delta functions (This suggests also the picture given in the post): $\Psi_{x0}(x) = \delta(x-x_0)$. Therefore the eigenvalue equation for the position operator is as follows:
$$\hat{x}\delta(x-x_0) = x_0\delta(x-x_0)$$
The product of any function multiplied by the delta function centered at $x_0$ turns into the function evaluated at $x_0$ times the delta function. The delta function on the right side does not disappear during the process until it would be integrated over. Therefore the equation is reasonable.
As one can observe, the found eigenfunction is a distribution and therefore cannot be member of Hilbert space. But with enough machinery of higher FA the eigenvalue equation of the position operator can be made mathematically rigorous. But it is a lot of mathematical overhead which can make the conceptional message less clear.
If one operates the position operator on a arbitrary wavefunction it can be formulated like this: $\Psi(x)$ is our arbitrary wave function.
We develop our arbitrary wave function in a linear combination of its uncountable number of eigenfunctions:
$$\Psi(x) = \int \Psi(x_0) \delta(x-x_0) dx_0$$
Furthermore:
$$\hat{x}\Psi(x) = \int \Psi(x_0) x \delta(x-x_0) dx_0 = \int \Psi(x_0) x_0 \delta(x-x_0) dx_0$$
The final collapse to a particular eigenfunction and its corresponding measured value $x_{0m}$ is difficult to describe mathematically. Actually the latter equation corresponds to similar operations for instance with the Hamilton operator:
$$H\Psi = H(\sum_n a_n \Psi_n) = \sum_n a_n E_n \Psi_n$$.
Projecting out the eigenfunction generated by the collapse is the second and final step not demonstrated here.
But it can be seen that the analogon between the development coefficients $a_n$ and the wavefunctions evaluated at different positions $x_0$ is absolutely reasonable. The absolute square of a particular development coefficient $|a_m|^2$ gives the probability that upon an energy measurement the value $E_m$ is obtained whereas $|\Psi(x_0)|^2$ gives us the probability density of finding the position of the particle at $x_0$ on application of the position operator respectively carrying out the position measurement.