Whether or not you advertise the prices you pay in the ad is entirely up to you, but generally it's not a good idea because you would be stuck with those rates for over a year. You might word your ad to explain that you pay one rate per pound when paper is brought to you, and another rate when you pick up and haul away. You should also run a regular classified ad, perhaps even one with more words in the Contract Jobs section of your daily paper. Your best advertising days will be Thursday through Saturday, the days when people are specifically thinking about cleaning up around the house or offices. These are also the days when people think about what they can do to earn extra money.
Paper recycling is the kind of business that snowballs with visibility and wordofmouth advertising.
It will definitely benefit you to join the various civic and service clubs in your area, attend their luncheons, and mingle with the business leaders in your area. Volunteer to assist in some fundraising events, and whenever possible, become a guest speaker and tell about your business. It isn't hard to stand up before a group of people and talk about your business, particularly if you know what you're talking about and believe in what you're saying. It does take at least an outline of a script, perhaps a few notes, a rehearsal, and the essential ingredient of enthusiasm. Make your talk interesting and informative.