Manager Mikel Arteta says the task of rebuilding Arsenal is a "massive job" and that there is an "enormous" difference between his side and Premier League champions Liverpool.
Arsenal beat Liverpool 2-1 on Wednesday but the London side are still ninth and trail the champions by 40 points.
"You can see how Liverpool build their squad and there's no magic, you need to improve the squad with quality players," Arteta told Sky Sports"And we need a bigger squad to compete in this competition. That's the challenge.It's a massive job. You only have to look at the difference between the two teams - it's enormous."
Arteta, who replaced Unai Emery in December, said that while quality was an issue, Arsenal were a match for Liverpool in other areas.
"The gap in many areas we can't improve in two months but the gap between accountability, energy, commitment and fight between the teams is now equal," Arteta added."Before it wasn't like this. I'm very proud of that. The rest will take some time but at least we've got that now and my message to the players is with that we can create something."
Arsenal take on Manchester City in the FA Cup semi-finals on Saturday.
David Silva and Gabriel Jesus scored first-half goals as Manchester City claimed a 2-1 Premier League victory over relegation-threatened Bournemouth at the Etihad Stadium on Wednesday.
Second-placed City broke the deadlock inside six minutes as Spanish midfielder Silva curled a sublime free kick into the top corner for his second set-piece goal in three league appearances.
Bournemouth went close to an equaliser from a free kick of their own but Junior Stanislas's effort was saved by City keeper Ederson who pushed it onto the post.
City doubled their advantage when Jesus slalomed past two defenders to score from close range, with Silva collecting his 10th assist of the league campaign.
Bournemouth avoided further damage in the second half when the VAR overturned a City penalty awarded for a tackle by defender Steve Cook on Brazilian striker Jesus.
Substitute David Brooks gave Bournemouth a lifeline with an 88th-minute goal after Callum Wilson found the Welsh midfielder to slot home from close range.
The duo went close to an equaliser in the closing stages but City held on to secure their sixth home league win in a row.
"It was difficult but our opponent played really well, they were really good and they pushed us a lot," City manager Pep Guardiola said."Their needs are higher than ours but we played our game."
Eddie Howe's Bournemouth recorded 14 attempts on goal but poor finishing left them in 18th place, three points adrift of the safety zone with two games remaining.
"We gave it everything tonight and real credit to the players to keep on going until the final whistle," Howe said."When you create those moments - and you don't get many against this quality of team - you need to take them.
"We need to match the performance level here and maybe surpass that against Southampton, that is all we should focus on now."