That's one of the main things that I have learned. The more pages I add, the lower the CTR. So I quit adding pages awhile ago
It doesn't work like that, you should add more pages to take traffic from other sites.
When I talk inventory, it's visitors, the number of pages you have doesn't impact the global number of people surfing.
Each visit to any page in the ad system is a hit, the more hits the more total ad impressions, that's the inventory they have to offer and if there's suddenly a ton of traffic but bad traffic, then prices plunge.
Depending on your website performance, the fee can and does change.
Yes, but Google only takes a percentage of that fee
If the adwords advertiser got charged a dollar, you get roughly $68. It the advertiser gets charged a dime, you probably get $0.06. It's not a situation where Google charges a dollar and you get a dime.
If you really want to know how it works, set up a test with AdWords and see how much you get charged vs. get paid. I did this in the early years and click my own ad so I wasn't defrauding anyone. I wasn't stupid enough to do this from my IP, I had some help with that experiment.
I also worked with some premium publisher back in the day and they only earned a slight bit more than we did, at least that was the case.
It's really a function of the type of site, the type of keywords, how good your SEO works, what type of visitors it attracts, etc. so it's not simple to figure out, it's complicated, but it can earn a boatload of money.
I've done it, others here have done it, but things change over time and if you sit still on the same site when it goes south that's not good. After a reasonable amount of time I'd suggest asking for someone to review your site and see if they spot anything.
Hell, one guy I helped got about 300% more traffic and a relative increase in earnings in just a few weeks and he swore his SEO was spot on. Someone else refused to make my suggested changes and got no results. ;)
Not like I know any magic but I've done it so many times I just know to check all the simple stuff first, titles, H1s, alt tags, etc. and make sure they use the right words in the right order. People tend to just write poorly for SEO and use personal pronouns like HE, IT, THEY, THAT, etc. instead of repeating the noun phrases, the actual keyword.
Search engines aren't smart enough to semantically know that 'it' means blue widget. Plus, writing more explicit text makes it easier for ESL to read and translate into foreign languages with fewer misunderstandings of intent.
Add all that together, and your SEO improves and AdSense improves.
It's not quite the same anymore but AdSense targeting used to be the window into your site's SEO soul, but now that they throw other crap ads in all the time it's not as good as it used to be. When my AdSense was 100% spot on, my SEO rocked, and my SE rankings were through the roof.