Final answer:
The statement is true as coral reefs support a high diversity of fish species, each with unique niches that minimize direct competition and allow for coexistence.
Step-by-step explanation:
The statement is true: many different species of fishes can live on the reef because each does something a little different from other species, thereby avoiding competition and the risk of competitive exclusion. Coral reefs are highly diverse ecosystems, with an estimated 4,000 fish species inhabiting them. These fish vary in their diet, with some feeding on coral, others on the cryptofauna, and still, others are predators, herbivores, or planktivores. This diversity in feeding and habitat utilization allows for a high level of niche differentiation, which reduces direct competition and allows a multitude of species to coexist on the reefs.