In modern novels, characterization tends to be sparse because modernist literature

a. does not emphasize physical descriptions
b. emphasizes society as a whole
c. does not use dialogue
d. uses narration to teach moral lessons

I think the answer is letter C. 
Many modernist writers focus more on moral lessons. They delve deeper on the effects of what is going on around them. They were able to see the decline of technology and were able to point out the consequences of modernity and technology in society.

The man thinks she's the lady he's trying to find. she then lifts the veil and he announces that he'd made a mistake and that he'd thought she was the woman, but had been wrong. truthfully, though, he'd been right. this reveals that the he didnt recognize her (though he said he would recognize her voice or her build) and that he's still looking for the girl. he doesnt find the woman appealing or attractive, and is more or less disgusted by her appearance. he didn't understand what the lady meant when she told him the story about her "friend"