IT works like most things... you would need a set of variables to tell the game who's turn it is, etc.
Global Variable - PlayerTurn = 1
[PlayerTurn=1]
[Press move right]
---- player 1 moves right
[Player 1 dies]
--- set PlayerTurn=2
[PlayerTurn=2]
[Press move right]
---- player 2 moves right
[Player 2 dies]
--- set PlayerTurn=1
The same would be done for picking how many players you want;
Global Variable - NumPlayers=0
[Click button for one player]
--- set NumPlayers=1
[Click button for two player]
--- set NumPlayers=2
You would use your NumPlayers variable setting to help conditions with the first set of pseudo events I wrote up there^
[Player 1 dies]
[NumPlayers=2]
--- set PlayerTurn=2
[else]
--- set PlayerTurn=1
--- respawn player
~Sol