Dear student,
Answer is 2. They can not synthesize functional B-galactosidase.
z gene for lac operon is mutated due to which the product of z gene which is B- galactosidase is not formed. B- galactosidase coverts lactose into glucose and galactose. Glucose is further utilised as the carbon source by E.coli. Therefore E.coli can not grow in the media containing lactose since it can not be broken down by B- galactosidase.
and source of energy is not available to E.coli.
Regards