how mercutio could have avoided the fight?

By not challenging Tybalt.

I don't mean to be simple but really Mercutio was looking for a fight. At the same time Tybalt was too so the meeting was obviously combustable. Tybalt was a hot-head and his quarrel was with Romeo. Mercutio might have attempted to calm things down with his signature sense of humour. Mercutio, however, has an interest in his friend Romeo (even beyond friendship) so it would be unlikely for Mercutio to act any other way than he did.