I am not sure how your agent can set a price without your agreeing to the price. The house is yours and you have to sign the agreement. I assume your agent did a comparable analysis for you comparing your house to like properties and explained how he/she priced the house?
Is the difference in the house only in square footage? Not saying your house is this way, but are there differences in the location of the houses (freeway vs. open space), condition of the house (complete remodel vs needing update or repairs?), neighborhood (desirable vs not), demographics around the neighborhood? floor plan of the house (sometimes some floor plan is very difficult to negotiate - one of the houses on an extremely desirable area is defined as tear-down because the house has strange floor plans). The lot location and condition (level vs slope?) or combination of several?
Again, I am saying any of the above applies to your house, i am just trying to point out that square footage is not everything when we price houses. Assuming he is not aiming for a quick sale, he should be able to explan his reasons to you until you are satisfied. .
If you still do not agree, then you can ask him to change the list price because the house is yours. Just make sure you price the house fairly and correctly. If you overprice your house, it can be difficult to sell - stay ahead of the curve is a good plan in this market.