How do flight fares work?

Flight fares are determined by a number of factors, which is why their prices can change so much even from day to day. Some of the factors that contribute to setting the price are amount of time a ticket is purchased in advance (the farther in advance, generally the cheaper the ticket), destination (popularity of the destination at a given time of year will determine the price), and how much of a particular airport hub one airline owns (the more one airline owns, the more expensive the tickets).