> In general, flight pricing seems rather opaque; I'm always confused by flights from city A to city B that are more expensive than flights from city A to city C with a layover in city B.

That example is pretty simple. If you consider a non stop flight as a different product than one with layover, non stop has less competition, people who don't mind a layover are more price sensitive and if there's a layover the airline will compete with all the other airlines trying to fill their hubs.