Answer: c. AVC is greater than their TR.
Step-by-step explanation:
At the point where Average Variable Costs are greater than Total Revenue, this means that the restaurant is unable to cover its Variable Costs. It will therefore shutdown in the short run being the off season so as to stop incurring the Variable Costs.
If they shut down for instance, they will incur only fixed costs. If they do not shut down, they will incur both fixed costs and Variable Costs which are greater than revenue and so cannot be covered thereby increasing losses.
It is therefore better to shutdown in the off-season to keep the losses to a minimum.