Mikel Arteta's side claimed an impressive 4-2 victory at Brighton and Hove Albion over the weekend to stretch their lead at the top of the table to seven points after Manchester City could only manage a 1-1 draw at home to Everton.
Arsenal have not won the league title since the 2003/2004 season but after going into the World Cup break with a five-point cushion, the Gunners have returned with impressive wins against West Ham United and Brighton.
They next face high-flying Newcastle United at home on Tuesday.
Merson is adamant Arsenal have silenced any doubters of their title credentials and are looking the real deal to take Man City's crown.
"I think they'll beat Newcastle," Merson said to Sky Sports. "They've just won two games, scored seven goals, confidence is high.
"They've won every game at home this season in the league - that's some doing.
"Arsenal are good to watch, it's not a fluke. You've got to look at Man City, they've lost at home to Brentford and drawn at home to Everton who are on a bad run.
"They are two games City are expected to win. That's five points dropped. I don't see anyone stopping Arsenal at the moment."
He added: "When we stopped for the World Cup you thought this could only harm Arsenal. They were flying. They've come back and scored seven goals in two games.
"They've got a platform, it's in their hands. I know there's a long way to go, but there are big teams in this league who can't win it - Chelsea, Liverpool, Tottenham, probably Man United.
"It's out of Arsenal and Man City unless the other teams go on the most extraordinary run you've ever seen in Premier League history.
"Who goes to Brighton and scores four goals? Arsenal are playing great football and at the moment, they're the best team in the country and the number one team.
"They've given themselves a little gap where they can afford to lose a few games. Man City are not going to win every game, so Arsenal are right in this, I couldn't talk highly enough about them.
"This is not a fluke, they are where they are because they are a very good football team.
"They went to Old Trafford and got beat, and I didn't think they deserved to. There are ways of losing matches and they bounced back.
"The other night, they went 1-0 down to West Ham and they came back and brushed them aside."
