Having lived in small communities all my life, I would say they are cheaper as far less is required. Water, power and communication I am uncertain, though internet appears better in certain smaller communities. You need far less law enforcement as crime is typically lower. Mail might cost more, but that is factored into shipping costs.
Smaller towns when done correctly can be more self-sufficient. Within an hour and half driving radius (minimum) from where I live, it is entirely farm land. I believe 90% of the food my family eats comes from these farms and is cheaper. I purchased half a cow recently from a local rancher - 295 lbs of grass fed beef for $1400 total, butcher fees included. Also purchased a whole pig from a local farmer ~250 lbs for $750, butcher fees included. From the same farmer I purchased 8 chickens a month from them at $12 - 15 per chicken from May - September, not cheaper but worth the money. We can get produce, raw milk, cheese and eggs from all the farmers here as well.
It takes money up front, planning and a deep freezer but we are supporting the local economy, reducing transportation costs and have locally sources food. If we didn't purchase our meat from the farmers I would hunt, but there isn't a need to do both as a family of four can only eat so much in a year.
These are some of the benefits when you downsize to small communities you can know your consumption patterns easier. We haven't been able to do this for everything but this year we have finally figured out the food issue. We still purchase spices, tea and coffee which at the store but those were the first items traded at a global scale if memory serves me correctly.
One would think there is enough land in the US to do this, but it would take a major cultural shift in eating patterns and the way we operate - feasible in theory but probably not reality.