The Gunners have failed with two bids for the winger, with the second believed to be around £60million, and now face competition from Chelsea.
The Blues want to bring in Mudryk during the current transfer window to bolster their attack, but he has so far shown a preference to join Arsenal.
Arteta has admitted the big transfer fees during January make it a difficult market, however player power also has an important role.
“Valuations have to be made between the selling club and the buying club,” said Arteta.
“And it is difficult but it shows there are a lot of clubs with a lot of financial power to spend big amounts, and we have to compete with them.
“To be smart, we have to see good opportunities and we have to be attractive for players.
“At the end of the day, players decide where they want to play, and if they want to play for our club, that is great.”