What does it mean when the power level flashes on an element display after I place a pan on it?

A flashing power level display indicates that no pan is present, the pan is made of unsuitable material, or the pan is not the correct size for that element. Place a suitable ferromagnetic pan on the element to stop the flashing. If you take longer than 90 seconds to place a suitable pan on the element, it will automatically turn off. (Page 9)

From the official Bosch Induction Cooktop NIT8665UC manual, page 9

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