There are 5 ways for A and B to sit together in a circle with 7 people. This can be calculated by treating A and B as a single entity and arranging them with the other 5 people in a circle. The number of ways to arrange 6 entities in a circle is (6-1)! = 5!. Therefore, there are 5! = 120 ways for A and B to sit together in a circle with 7 people.