Final answer:
The reader can infer that Petrocelli thinks Steve is friends with James based on the dialogue in Monster.
Step-by-step explanation:
Based on the excerpt from Monster, the reader can infer that Petrocelli thinks Steve is friends with James. When Petrocelli asks Steve if he knows James King, Steve responds by saying that he knows him from the neighborhood. This implies that Steve and James live in the same neighborhood and suggests a level of familiarity between them. Therefore, the inference that Petrocelli thinks Steve is friends with James is a reasonable one based on the given dialogue.
Learn more about Inference in a dialogue