The correct option is A By repression of transcription
According to lac operon concept, regulator gene regulates the expression of structural genes by its protein product that are mostly transcription factors. These transcription factors, the regulatory protein, bind to the operator region which is located just upstream of the binding site of the RNA polymerase and hence, prevent the transcription. Operator is a DNA sequence present between the promoter region and the first coding gene. This operator region serves as repressor protein binding site. Hence, regulator gene regulates the expression of structural genes by repression of transcription.