The "Operon concept" given by Jacob and Monod states that the metabolic pathways are regulated as a unit. A classic example to understand the "Operon concept" is the Lactose operon or Lac operon seen in prokaryotes like E. coli.

E.coli when grown in a medium containing lactose produces the following three enzymes which break down lactose into glucose and galactose:

1. ß-galactosidase

2. permease

3. transacetylase

For convenience, these enzymes are named as enzyme z, y and a.

The three structural genes named z, y and a code for the three enzymes named above. These genes are located in a row (hence, are said to be linked). They are called structural genes because they contain the information to determine the sequence of amino acids present in a protein. 

During transcription, all three genes are transcribed by RNA polymerase into a single stretch of mRNA. Each gene segment is called a cistron and hence such an mRNA is called polycistronic mRNA.

The activities of these three genes are regulated by a single gene called the operator gene which is present before the cistron z.

The operator and the structural genes (cistrons) together are collectively known as 'operon'.

The functioning of operator gene is dependent on a regulator gene (also called inhibitor gene) located some distance away from it. The regulator gene is constantly transcribing mRNA to produce the repressor protein and blocks the operator gene (thereby blocking RNA polymerase from transcribing the structural genes z,y and a)

The sequence of events in the presence and absence of an inducer (lactose) are as follows:

CASE I - Inducer (lactose) is absent in the medium:

The repressor proteins remain bound to the operator gene thereby blocking it (meaning the switch is turned off). Thus, the 3 structural genes are not expressed and no enzymes are produced.

CASE II - Inducer (lactose) is present in the medium:

Presence of inducer attracts binding of repressor (which was otherwise blocking the operator gene). In the process of forming the inducer-repressor complex, the repressor gets displaced from the operator gene and the operator gene is no longer blocked (meaning the switch is turned on). Thus, the 3 structural genes are exoressed and the enzymes are produced to catabolise the lactose in the medium.