This demonstrates how a capacitor can couple an AC signal between two different DC voltages (1 V on the left, 2.5 V on the right). The capacitor looks like an open circuit for DC voltages. It forms a highpss filter with the two resistors, resulting in a cutoff frequency of 1/(2*pi*R1||R2*C). If the frequencies of interest are above this cutoff frequency, then it can be approximated as a short circuit for AC signals. The values chosen result in a cutoff frequency of 1 Hz.
