"Cells in the lining of the stomach produce a protein called pepsinogen. When this protein is released into the chamber of the stomach, the stomach acid cleaves off a section of the protein, which now becomes an enzyme called pepsin. In this form, pepsin will actively begin the breakdown of proteins in food. This is an example of which type of eukaryotic gene regulation?"

This is an example of Precursor gene regulation (protein translation) type of eukaryotic gene regulation.

Explanation:

The source which breakdown proteins into smaller amino acid is pepsin and generated as top cells within stomach lining or membrane, responsible for pepsinogen emission inside stomach. It is represented as zymogen having an extra 44 amino acids linkage as its primary structure. Hydrochloric acid (HCl) releases this zymogen which is emitted from the parietal cells in the stomach lining.

Once food is consumed, the hormone gastrine and the vagus nerve cause the secretion of both pepsinogen and HCl from the stomach lining. Hydrochloric acid induces an acidic environment that allows pepsinogen to unfold in an autocatalytic manner and thus generates pepsin the active form.