The optical power output vs. forward current characteristics are measured by supplying current in the forward direction of the laser diode and detecting the generated laser light with a photodetector whose size is large enough.
Laser diodes are classified into DC (CW: continuous wave) drive and pulse drive, depending on their drive circuits.
Photodetectors in general use are silicon PIN diodes or APDs (Avalanche PhotoDiode) calibrated with a reference photodiode.