OP, the flaw in your premise is that the price of the pistol is not based on the amount of matter in its composition (IE bigger does not necessarily equal more expensive).
In the case of 1911s, the opposite is often true. It is hard to reduce the size of the basic design without negative impact on reliability. This is why you see many noted instructors say "Go no smaller than a 4.25" Commander length." A lot of 3" and 3.5" 1911s have earned reputations for being hard to run.
So, if a manufacturer can build a small 1911 that gets a good reputation for reliability, that manufacturer can charge a premium.
I have no experience with the EMP, so I have no opinion on what it is worth. All I am saying is that a $1107 price tag does not sound unreasonable IF the small 1911 is reliable.
Edit: another small 1911 for comparison would be the STI Shadow, which I think is in the same price ballbark; I believe the small Dan Wesson 9mm 1911 costs more.