I'm still new to this folding bike craze. I'm just curious why the Dahon full size bikes are less expensive than the 20" or smaller models.

have a look at the quality of the components. Dahon full size bikes tend to be average in terms of component quality, wheras some of the more expensive folders have very tasty gears, hubs, brakes etc. Plus some of them have structural parts made in exotic metals.

That's no more the case than for any other manufacturer. You need to come up with a side-by side comparision for your statement to be meaningful.

Yeah, I figure components would be some of the reasons why a full size would be cheaper than the 16's or 20's. But if it's the same Manufacturer like Dahon, I would assume the components would be the same quality as the smaller bikes. I wouldn't see the point of having good quality components for smaller bikes and skimping out on the larger bikes because they are still using their brand name and it wouldn't be good for their reputation.

The only reason why i brought up this question is because, I figure the bigger the parts (assuming same company and quality) the more expensive it would be.

In this case, the bigger the parts, the more of them are made, so the greater the economies of scale, probably. That's for the parts that are shared with non-folding bikes.

Maybe the Contractor that actually makes them is different, and each contract is different,
large wheel partially fold or knock down, like the Breakaway fittings,
can use more common parts , so less custom- specialty parts, so has lower costs.

I guess another reason could be that full size bikes can be made with a few metal tubes and a tig welder (more or less), wheras folding bikes require more robust and specialised castings for the frames and custom made catches and attachments.