Step 1: Concept
The length of the normal segment from point $(x, y)$ to the $X$-axis is given by $|y\sqrt{1 + (dy/dx)^2}|$.
Step 2: Meaning
Let the slope of the tangent be $m = dy/dx$. The length $PQ = k$ gives $y^2(1 + m^2) = k^2$.
Step 3: Analysis
Substituting $m = dy/dx$, we get $y^2[1 + (dy/dx)^2] = k^2$. Rearranging, $(dy/dx)^2 = (k^2 - y^2)/y^2$, which leads to the differential equation $y dy = \pm\sqrt{k^2 - y^2} dx$. Integrating both sides results in $x^2 + y^2 = C$.
Step 4: Conclusion
Since the curve passes through $(0, k)$, we find $0^2 + k^2 = C$, so $C = k^2$. The equation is $x^2 + y^2 = k^2$.
Final Answer: (A)