In Act III of Romeo and Juliet, what does Mercutio think is the reason for Romeo refusing to fight?
Mercutio thinks Romeo refuses to fight with Tybalt when challenged because he is afraid of him. Neither Mercutio nor Tybalt knows Romeo secretly married Tybalt's cousin Juliet and now feels well disposed to all members of the Capulet family because of his new relationship with them. Mercutio believes Romeo's refusal to fight the insulting and belligerent Tybalt is disgraceful and challenges Tybalt to fight him instead.
Romeo tries to prevent Mercutio and Tybalt from fighting by getting between them. He reminds them the Prince forbids sword-fighting in the streets. Tybalt gives Mercutio a fatal sword-wound. According to the stage directions:
Tybalt under Romeo's arm thrusts Mercutio in, and flies with his Followers.
Because Mercutio is his best friend and a member of the house of Montague, Romeo feels compelled to challenge Tybalt in revenge, especially since his attempted intervention was responsible for Mercutio's fatal wound. When Tybalt returns to the scene, the two young men have a brief duel in which Romeo kills Tybalt in the heat of anger.
This marks the turning point in the play. It leads to the deaths of Juliet and Romeo in the tomb after the young bride is in a state resembling death.