Solution : Inside The Story of 3 Dragons

What was the story?

Let's see what are key statements in the story once again.

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Dragon 1: You may ask us one question, then you must guess which dragon is which.

Dragon 2: He’s lying. You may get three questions.

Dragon 3: Oh no. It’s definitely one question.

I asked the first dragon a question.

Me: What would the second dragon say if I were to ask it if the 3rd dragon had been lying when it agreed with the first one that I could ask only one question?

Dragon 1: He’d say, “Yes, the 3rd dragon was lying”

Then I asked a second question addressing the three dragons…… But they remained silent.

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On second question, they remained silent clearly indicates that only 1 question was allowed to ask. Hence, Dragon 2 must be lying for sure.

After knowing the fact that Dragon 2 lied in it's first statement, we know that first statements of Dragon 1 and Dragon 3 are true. 

Now, there are 2 cases possible for Dragon 1 and Dragon 3.

CASE 1 : Dragon 1 speaks alternate and Dragon 3 always tells the truth.

That means the Dragon 1 should lie in it's next statement given in response of my question. 

If Dragon 3 is always telling the truth, the Dragon 2 will always say that Dragon 3 is liar. 

Let's simplify my question to the Dragon 1 as - 

"What will Dragon 2 say if I ask it whether Dragon 3 is lying?" 

Now as per our logic the Dragon 1 should lie in response as - 

Dragon 1: He’d say, “Nope, the 3rd dragon is telling the truth” 

This is contradictory the actual response given by Dragon 1 to the question - 

"What will Dragon 2 say if I ask it whether Dragon 3 is lying?" 

Dragon 1: He’d say, “Yes, the 3rd dragon was lying”

Hence, assumption that Dragon 1 speaks alternate and Dragon 3 tells the truth goes wrong here.

CASE 2 : Dragon 1 tells the truth and Dragon 3 speaks alternate.

That means Dragon 1 will tell truth in response to my question. Since, Dragon 3 is telling truth in it's first statement the always lying Dragon 2 will say that Dragon 3 is lying if asked about Dragon 3.

This is the truth that Dragon 1 tells us in response to my question as - 

"What will Dragon 2 say if I ask it whether Dragon 3 is lying?" 

Dragon 1: He’d say, “Yes, the 3rd dragon was lying”

Hence, this assumption i.e. Dragon 1 tells the truth and Dragon 3 speaks alternate should be correct.

To conclude, Dragon 1 is telling the truth, Dragon 2 always lies and Dragon 3 speaks alternate.