Top: The gene is essentially turned off. There is no lactose to inhibit the repressor, so the repressor binds to the operator, which obstructs the RNA polymerase from binding to the promoter and making lactase.
Bottom: The gene is turned on. Lactose is inhibiting the repressor, allowing the RNA polymerase to bind with the promoter, and express the genes, which synthesize lactase. Eventually, the lactase will digest all of the lactose, until there is none to bind to the repressor. The repressor will then bind to the operator, stopping the manufacture of lactase.
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