Airline prices move in steps rather than sliding smoothly, and the reason is structural. Seats are not priced individually but sold from a set of discrete inventory classes.
Seats are sold in classes, not at one price
A single cabin contains many fare classes, each with its own price and its own conditions on changes, refunds and baggage.
The aircraft's seats are allocated across these classes, so the cheapest class may hold only a handful even on a lightly booked flight.
What a passenger sees is the lowest class currently available. The seat itself is identical regardless of which class paid for it.
Inventory opens and closes rather than sliding
When the allocation in a class is exhausted, that class closes and the displayed price jumps to the next one up. Nothing gradual happens in between.
This is why fares appear to rise in sudden increments. The jump reflects a class closing rather than a price being adjusted upward.
The same mechanism works in reverse. If a class reopens because a booking was cancelled or a forecast revised, the fare can fall back sharply.
Forecasting decides how many cheap seats exist
Before sales open, systems forecast how many passengers will eventually pay the higher fares, usually booking close to departure for business reasons.
Seats are then protected for that expected demand, and everything left over is released into the discounted classes to secure early revenue.
A route with strong late demand will therefore offer very few cheap seats at any point, while a leisure route releases many.
The forecast is revised continuously
Booking pace is compared against expectation throughout the selling period, and allocations are adjusted whenever reality diverges from the model.
Slower-than-expected sales cause cheaper classes to reopen, which is the source of unexpected late bargains on flights that looked expensive.
Faster sales close them permanently. Once the system concludes the flight will fill without discounting, the low classes do not return.
Why identical seats carry different rules
Fare classes differ in flexibility as well as price, and this is deliberate. Restrictions exist to stop a passenger who values flexibility from buying the cheap seat.
Advance purchase requirements, minimum stays and change penalties all serve to separate the two groups without asking anyone to declare their purpose.
Understanding this makes the pricing legible. The airline is not charging for the seat but for the combination of the seat and the conditions attached to it.