Final answer:
When LacI protein binds with the lac operator, it prevents the production of enzymes for lactose digestion and transcription of structural genes. Only when lactose converts to allolactose, which binds to and inactivates LacI, can transcription occur.
Step-by-step explanation:
When the LacI protein is bound to the lac operator, two key things that are not produced are enzymes to digest lactose and structural genes transcript. The presence of the LacI repressor protein attached to the operator inhibits RNA polymerase from transcribing the lac operon's genes. However, when lactose is available, it gets converted to allolactose, which binds to the LacI repressor.
This binding changes the shape of the repressor so it can no longer bind to the operator, leading to transcription of the operon and production of the necessary enzymes. When these two conditions of low glucose and presence of lactose are met, the operon is transcribed.