Can I use my iMac mid 2011 as an external display for my MacBook Air 2020?

No Mac manufactured from 2020 onward can utilize any iMac in Target Display Mode.

From this article:

Use your iMac as a display with target display mode - Apple Support

iMac models introduced in 2011, 2012, 2013, and mid 2014

To use any of these iMac models as an external display:

• The iMac used as a display must have macOS High Sierra or earlier installed.
• The other Mac that you're connecting it to must have been introduced in 2019 or earlier and have macOS Catalina or earlier installed.
• The cable connecting the two Mac computers must be a Thunderbolt  or Thunderbolt 2  cable.

neilmce Said:

"Can I use my iMac mid 2011 as an external display for my MacBook Air 2020?"

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Use Target Disk Mode:

As long as all is met, then yes it will work. Do so through Target Disk Mode: Use your iMac as a Display with Target Display Mode - Apple Support. A 2011 iMac with High Sierra will do just fine, according to the link.