I agree with you that Manchester City is playing weaker football compared to the one they played last season. Last season, Manchester City's performance was amazing, and they scored a lot of goals against their opponents, which helped them win the Premier League trophy last season. Since Manchester City is struggling to score enough goals against their opponent, that doesn't mean that Liverpool has a higher chance of winning the league, because if Manchester City fails to overtake Liverpool in the league table, Arsenal will do that.
What makes you think Arsenal will do it? Yes, they're good now too, but they, generally like MC and Liverpool can make a mistake and drop out of the championship race. If you think about it that way, not too far behind all of them is Aston Vila, maybe they will still fight too, although I don't believe that, but anything can happen