First-half goals from Trent Alexander-Arnold and Roberto Firmino saw the Reds seize control of the clash at Stamford Bridge on Sunday.
But Frank Lampards side rallied after half-time and halved the deficit through the returning NGolo Kante.
While Chelsea failed to find an equaliser, Merson was impressed by the Blues performance and says they should be buoyed by how they fared against the Premier League leaders.
People know Im a Chelsea fan, and I was pleased with their performance on Sunday – not the result, but theres a lot of positives to come out of that game, Merson told Sky Sports.
Look at Chelsea now and you think they could get in the top four. Theyve given a lot of people heart, and itll give Frank heart.
I think expectations have gone up now. After that performance, youre looking at top four. When you see whats around, youre looking at top four.
With losing the game, its backfired in a way – the expectations have gone up rather than down. Ive seen enough yesterday to say theyll be in the mix.
Arsenal hero Merson added: Chelsea looked like one of the better lot of the six yesterday. The other two are head and shoulders above, head and shoulders.
But they havent been able to buy anyone, other teams are spending 80, 90, 100 million quid.
Its about bringing the kids through. If Franks not the manager, Tomori, Mount and Abraham wouldnt just be in the team, theyd be out on loan.
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