Supply and Demand is only part of it. They need to have staff there, some of whom are working on Full-Time undoubtedly, those costs for their wages are spread amongst far less passengers than at other larger airports.
They're operated by Contractors such as Alliance etc... so Qantas and Virgin need to make their cut and then so do the people who hold the Contracts.
Add in the fact that they know their main customers are likely from the mining sector who are on good coin or having their travel paid for or subsidised by the Company, so they know they add a little on the top as well. Rather like Property in Darwin where they know the Defence Force often subsidises it so prices that would otherwise be laughed at in most of the country don't look as bad.
This inquiry really is laughable to say the least I think, unless there is some kind of evidence of collusion between the majors in terms of the prices there really is nothing that can be done, they can't demand that they lower the prices so their only real option is to try and give incentives for other operators to have a go and add a bit of extra competition! Certainly doesn't require the money and expense of an inquiry to work that out does it?!