The Gunners sit six points behind leaders Liverpool, who could widen the gap when they play Everton in the Merseyside Derby on Wednesday.
With Liverpool’s game in hand potentially extending their lead, Arsenal’s clash at the King Power Stadium becomes even more crucial for their title ambitions.
"They’ve got two (trophies left to win), one they could be out of by Wednesday night, in my opinion," Merson told Sky Sports.
"If Liverpool win at Everton, that’ll be nine points clear with 15 odd games left.
"They’d have to lose four of them, which I think would be impossible. To me, it comes down to Wednesday.
"I did half-fancy them in the Champions League but I’ve just seen them get destroyed by Newcastle over two legs and – no disrespect – there’s a lot better teams than Newcastle in the Champions League knockout phase, so for me they’re right up against it.
"It all depends (on) how many points they get beaten by, in the end, if they don’t win the league. If they come second again, he’s (Arteta) going to stay, I hope people don’t think, “Oh, let’s change the manager'.
"But you had to be there and ready to pounce when Man City did drop off, and he (Arteta) didn't and Liverpool have."