Lacking key men, including skipper Vincent Kompany who sat forlornly in the stands as he began a four-match ban, and drained by the energy exerted at having to play for 78 minutes with 10 men against Manchester United at the weekend, City were a shadow of their usual selves.
It represented the first time they had lost back-to-back games at the Etihad Stadium since February 2008, before Sheikh Mansour began his billion pound quest to conquer the English game.
The only consolation came from knowing they could still reach a Carling Cup final against either Crystal Palace or Cardiff if they can reverse this result in the second leg at Anfield in a fortnight.
Little wonder Roberto Mancini was so keen to fight Kompany's suspension.
With Kolo Toure on African Nations Cup duty with the Ivory Coast, it forced the City boss to pitch Stefan Savic into the biggest game of his fledgling Blues career.
The Montenegrin was only 21 last week and has started just one Barclays Premier League game for City since joining from Partizan Belgrade in the summer.
It soon became clear he was in for a difficult evening.
That Andy Carroll was able to spin away from him and race onto Stewart Downing's through-ball said everything given the wretched time the Liverpool striker has had in his 12 months on Merseyside.
Returning keeper Joe Hart was equal to the shot, just as he was when Gerrard went for the far corner a couple of minutes later and Downing had an effort deflected towards the same area of his goal.
Savic had another trick up his sleeve though as Daniel Agger forced his way into the box from the corner. The youngster panicked, attempted to clear when he was nowhere near favourite to reach the ball and Agger bit the dust.
Referee Lee Mason awarded the spot-kick and Gerrard drove it past England team-mate Hart to put the visitors ahead.
That all this occurred inside the opening 11 minutes emphasised the difficulties City were having, and no one epitomised them more than Mario Balotelli.
An injury doubt beforehand, the combustible Italian reacted in anger when Charlie Adam bundled him over, then tapped him on the head as he ran away from the scene.
Balotelli belted the subsequent free-kick into the wall and then hobbled away for no discernable reason.
After a few more minutes of relative inactivity, during which he let a straightforward pass roll out for a throw-in and gave a free-kick as he tried to make amends, Mancini decided he had seen enough.
Balotelli headed straight for the tunnel, bringing an end to another bizarre chapter in his career.
It was not until the last moments of the half that City finally roused themselves, only for Samir Nasri to be denied by Pepe Reina and James Milner to fire Micah Richards' cut-back over.
On Sunday, City responded magnificently to a far worse half-time scoreline and almost secured a result that would stand alongside any in this stellar season.
But they needed the kind of lift Aleksandar Kolarov gave them against United with that magnificent free-kick.
This time around, they just encountered frustration as Reina stayed on his feet long enough to prevent Aguero getting a shot on target after the South American had spotted Martin Kelly about to play a blind backpass.
Unusually poor in a heavy defeat on the same ground eight days ago, Reina was also in the right place to deny Richards' close-range header after the stand-in City skipper had met Nasri's corner.
The disappointment was that instead of going for the jugular, against opponents so lacking in verve compared to their thrill-a-minute efforts earlier in the season, Liverpool grew increasingly more negative.
By the time Jamie Carragher replaced Craig Bellamy 11 minutes from time to take up a midfield holding role, the visitors had six orthodox defenders on the field.
Little wonder City failed to make a chance of note as they continued to run into a red brick wall in what time remained.