The Gunners moved back to the summit of the Premier League table this afternoon with a 2-0 win over Crystal Palace at the Emirates Stadium, but City still remain heavy favourites to finish the season on top.
"I can understand that (why City are favourites) completely because we haven't done it for a while, and as well I must say that we face quality competitors," Wenger told reporters.
"We do not play against average teams and Man City have scored over 100 goals, so everybody thinks 'can you beat these teams?' I say yes and that is what we have to show.
"It is all to do. The only thing I can say is that after 24 games we are there, and it's now about how we finish the season."
Wenger's claims will be tested over the coming weeks when the Gunners face Liverpool twice, Bayern Munich twice, Manchester United, Chelsea, Manchester City, Tottenham Hotspur and Everton.