Answer: C. The regulatory gene lacI is NOT part of the operon. It is located upstream and is transcribed independently, constitutively producing the repressor protein. The operon proper includes the promoter, operator, and the three structural genes lacZ, lacY, lacA (NCERT Class 12 Biology Chapter 5, page 100).
Why A is wrong: A — This is correct. The lac operon is switched on (induced) only when lactose is present, making it a classic inducible system.
Why B is wrong: B — This is correct. The three structural genes share one promoter and are transcribed together as a single polycistronic mRNA, which is then translated into three separate proteins.
Why D is wrong: D — This is correct. β-galactosidase (product of lacZ) has a side activity that isomerises lactose to allolactose, which then acts as the true inducer. This is an accepted biochemical detail consistent with NCERT.