Legal Question in Consumer Law in Massachusetts

"Is this potentially a misleading/fraudulent advertisement?" Yes, but: (1) there might be disclaimer language in the ad about not being responsible for typographic errors, (2) you weren't injured because you did not formally and unconditionally accept the dealer's purchase price right then, with a bank check for the full price. Any acceptance contingent on financing weakens your case as you don't know if you would qualify for financing and allows the dealer to say "no" before your financing is approved.

A history of the dealer doing this might, might just close off the escape door of the dealer saying "no" before your financing is approved. The common phrase for this behavior is "bait and switch", throwing out bait so you come in but then switching what is available.

If this continues, I recommend you complain to the Massachusetts Attorney General and the state licensing folks.

"I just want to know if the dealership is legally required to honor their listing." Yes, but it can change its mind until you formally accept the offer with the full price immediately available. Otherwise it goes into the gray area as discussed above, depending on the dealer's history of doing this.