Merino eased Arsenal's attacking concerns with two late goals off the bench to secure a 2-0 win at relegation-threatened Leicester on Saturday that kept the Gunners in the Premier League title race.
Manchester City found a new scoring threat, too, as January signing Omar Marmoush netted a 14-minute hat-trick in the first half of a 4-0 win over Newcastle that lifted Pep Guardiola's team into fourth.
The champions are now only three points behind Nottingham Forest, who lost at Fulham 2-1.
With Arsenal playing their first game since leading scorer Kai Havertz was ruled out for the season, their makeshift front three struggled to create chances until central midfielder Merino went on in the 69th minute to play as a striker.
The Spain international looked like a natural as he quickly got on the end of two good crosses, heading home a pinpoint ball into the box from 17-year-old Ethan Nwaneri in the 81st and then steering in a low assist from Leandro Trossard in the 87th.
"It was a bit of a surprise because it's the first time in my career I played that position," Merino said. "But he (manager Mikel Arteta) told me go on as a striker and to make sure I go with my strengths. I think I solved it."
The win puts Arsenal within four points of leaders Liverpool, who can restore the gap to seven points when they host Wolves at home on Sunday, while Leicester remained rooted in the relegation zone, two points behind 17th-place Wolves.
Unlike Arsenal, City did bring in reinforcements in January and Marmoush showed just why the club spent 70 million euros ($A116 million) on the former Eintracht Frankfurt player.
The Egypt forward netted his first goal for the club after running onto a long ball from goalkeeper Ederson and calmly lobbing it over Martin Dubravka.
It was Ederson's sixth career Premier League assist, a record for goalkeepers.
Marmoush netted his second just five minutes later after being teed up in the area by Ilkay Gundogan, and completed his hat-trick in the 33rd after Savinho broke into the area and squared for him to slot home.
Substitute James McAtee completed the rout in the 84th, but there was a late scare for City as Erling Haaland went off after appearing to hurt his knee late on, though Guardiola was hopeful it wasn't too serious.
Forest's hopes of a surprising top-four finish took a blow as the team's pattern of inconsistency continued at Fulham, who'd not won at home since early December.
Calvin Bassey headed home the winner for Fulham after Forest's Chris Wood cancelled out the opener by Emile Smith Rowe.
In other results, Aston Villa managed only a 1-1 draw at home against relegation strugglers Ipswich despite visiting defender Axel Tuanzebe being sent off for a second booking in the 40th.
Ipswich had taken the lead through Liam Delap in the 56th before Ollie Watkins equalised.
Brentford won at West Ham 1-0, while fifth-placed Bournemouth continued their brilliant season by beating last-placed Southampton 3-1.
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