Ole Gunnar Solskjaer has admitted rivals City are the top dogs in Manchester after claiming derby day victory at Old Trafford.
Manchester United are currently on their worst run since 1962 after losing seven of their last nine Premier League games.
In that time, the Red Devils have scored just six times, conceding 20. Since April 2, the club have not scored from open play either.
Sir Alex Ferguson’s retirement in 2013, the power shift in Manchester has swung in favour of the Citizens.
Wednesday’s win moved Pep Guardiola’s men one point clear of Liverpool at the top of the table and Solskjaer conceded there is a gap to be closed.
“We got a reaction, but we were beaten by a better team. But we had a go,” he told Sky Sports.
“We didn’t hit the target too many times but the work rate was there. We just wasn’t good enough.
“There’s a difference in quality – that’s why they are top of the league. They’ve set the standard. Living in Manchester, we can’t be happy with that.
“That’s up to us to close the gap and eventually overtake them. That’s the challenge.”
Although Arsenal suffered a humiliating defeat at Wolves, United look set for Europa League football next season.
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With Chelsea three points clear in fourth spot, there are just three games left for United to perform an unlikely comeback and save their season.
The Blues travel to Old Trafford on Sunday, before United face Cardiff City and then relegated Huddersfield Town to bring their season to a close.
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