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Don't pay it!
I don't care if you have a billion dollars in the bank. Spending more than MSRP is a waste of money that you shouldn't have to do. Go to another dealership, or learn to negotiate more aggressively. Don't ever take a dealer's price as granted unless that price is what you have researched to be MSRP or less. Good dealer to get to know on this site are KarlChev and CamaroScotty.
To answer your question, price gouging is over the table. The dealer can charge anything for a car. Retail is not enforced by law or regulations.
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