What skin condition is characterized by a "cup-shaped" papule?

The skin condition characterized by a "cup-shaped" papule is indeed dermatofibroma. Dermatofibromas are benign tumors that typically present as firm nodules on the skin. They often have a unique appearance, including a raised, brownish color, and are often described as having a cup or dome shape. The surface is usually adherent to the overlying skin and may feel a bit rubbery.

In contrast, basal cell carcinoma may appear as a raised, pearly nodule but does not generally have the cup-like shape associated with dermatofibromas. Squamous cell carcinoma often presents as a crusted, scaly lesion that does not resemble the characteristics of a cup-shaped papule. Melanoma, while it can take many forms, is most commonly irregular in shape and color, and does not typically exhibit the defining characteristics of a dermatofibroma. The distinct cup shape of the dermatofibroma thus makes it the correct answer.