How is air fair is determined according to the seat availability?

Paramjeet_1988

Par 100 posts (V.I.P)
Seeing the current uproar of the Indian airlines charging fairs that are equivalent of the USA return ticket for a short distance such as from Delhi to Chennai it has been decided by the civil aviation ministry to look into this matter. A civil aviation economic advisory committee has been formed that will try to liberalize the air fairs according to the international standards. I just know that air fair increases as the flight time nears by and it is determined by the supply and the demand forces, does any body can clarify that how the air fair is actually determined?
 
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